NOTICE TO THE MEMBERS - rexnordindia.in · Mrs. Sharda K. Talwar was appointed as a Vice President...

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NOTICE is hereby given that the 23rd Annual General Meeting of the membersof REXNORD ELECTRONICS AND CONTROLS LIMITED will be held onFriday, September 30, 2011 at 11.00 A. M. at the registered office of the Companyat 92-D, Govt. Industrial Estate, Charkop, Kandivli [West], Mumbai - 400 067 totransact, with or without modification(s) the following businesses:

ORDINARY BUSINESS:1. To receive, consider and adopt the audited Profit and Loss Account for the year

ended March 31, 2011 and the Balance Sheet as on that date together with theReports of the Directors and Auditors thereon.

2. To appoint a director in place of Mr. Ram Sanehi, who retires from office byrotation, and being eligible offers himself for re-appointment.

3. To appoint a director in place of Mr. Ayyaswami Sundram, who retires fromoffice by rotation, and being eligible offers himself for re-appointment.

4. To appoint Auditors of the Company to hold office from the conclusion of thisAnnual General Meeting until the conclusion of the next Annual General Meetingand to authorise the Board to fix their remuneration.

SPECIAL BUSINESS:To consider and if thought fit, to pass with or without modification (s), the followingResolutions:

5. AS A SPECIAL RESOLUTION:“RESOLVED THAT in supersession of all earlier resolutions passed in thisregards, the Company do hereby accord its consent under the provisions of Section314 of the Companies Act, 1956 and other applicable provisions of Law to theappointment of Mr. Kundan K. Talwar relative of Directors of the Company asVice President [Production] of the Company w.e.f. April 1, 2011 at a consolidatedSalary not exceeding 2,50,000/- p.m, together with usual allowances, commission,benefits and perquisites.

RESOLVED FURTHER THAT the board is authorized to finalise hisremuneration within the consolidated Salary upto 2,50,000/- p.m. from time totime.”

6. AS A SPECIAL RESOLUTION:“RESOLVED THAT in supersession of all earlier resolutions passed in thisregards, the Company do hereby accord its consent under the provisions of Section314 of the Companies Act, 1956 and other applicable provisions of Law to theappointment of Mr. Kunal Dilip Tanna relative of Directors of the Company asVice President [International Business] of the Company w.e.f. April 1, 2011 at aconsolidated Salary not exceeding 2,50,000/- p.m. together with usual allowances,commission, benefits and perquisites.

RESOLVED FURTHER THAT the board is authorized to finalise hisremuneration within the consolidated Salary upto 2,50,000/- p.m. from time totime.”

7. AS A SPECIAL RESOLUTION:“RESOLVED THAT in supersession of all earlier resolutions passed in thisregards, the Company do hereby accord its consent under the provisions of Section314 of the Companies Act, 1956 and other applicable provisions of Law to theappointment of Mrs. Sharda K. Talwar a relative of Directors of the Company asVice President [Facilities] of the Company w.e.f. April 1, 2011 at a consolidatedSalary not exceeding 2,50,000/- p.m. together with usual allowances, benefitsand perquisites.

NOTICE TO THE MEMBERS

RESOLVED FURTHER THAT the board is authorized to finalise herremuneration within the consolidated Salary upto 2,50,000/- p.m. from time totime.”

By order of the BoardREXNORD ELECTRONICS AND CONTROLS LIMITED

Kishore Chand Talwar Chairman & Managing Director

Place: MumbaiDated: 31st August, 2011

NOTES:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING ISENTITLED TO APPOINT ONE OR MORE PROXIES TO ATTEND ANDVOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE AMEMBER OF THE COMPANY.

THE INSTRUMENT APPOINTING A PROXY SHOULD HOWEVER BEDEPOSITED AT THE REGISTERED OFFICE OF THE COMPANY DULYCOMPLETED NOT LESS THAN FORTY-EIGHT HOURS BEFORE THECOMMENCEMENT OF THE MEETING.

2. The Register of Members and the Share Transfer Books of the Company willremain closed from 28/09/2011 to 30/09/2011 (both days inclusive).

3. Members desirous of seeking any information concerning the Accounts of theCompany are requested to address their queries in writing to the Company atleast seven days before the date of the meeting so that the requested informationcan be made available at the time of the meeting.

4. Members / Proxies are requested to please bring their copies of the AnnualReport to the meeting since copies of the Annual Report will not be distributedat the meeting.

5. The shares of the Company are listed on Mumbai, Ahmedabad, Bangaloreand Delhi Stock Exchanges.

6a. In view of Circular issued by the SEBI for appointing common agency forboth the modes of transfers i.e. physical as well as Demat, the Company hasalready appointed M/s. BIG SHARE SERVICES PRIVATE LIMITED asRegistrar & Transfer Agent for both the modes of transfer i.e. physical as wellas Demat. Members are therefore requested to send their grievances to themfor early disposal at the address given below.

6b. Members holding Shares in physical form are requested to notify immediatelyany change in their address with PIN CODE to the Registrar and TransferAgent of the Company at the address given below AND in case their sharesare held in Demat, this information should be passed on directly to theirrespective Depository Participants and not to the Company.

M/s. BIG SHARE SERVICES PRIVATE LIMITED[Unit: Rexnord Electronics And Controls Limited]E/2, Ansa Industrial Estate, Sakivihar Road,Saki Naka, Andheri [East], Mumbai - 400 072.Tel: 022-28473747 / 3474E-mail: [email protected]

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7. All documents referred to in the Notice are open for inspection at the registeredoffice of the Company during office hours on all working days except publicholidays between 11.00 a.m. and 1.00 p.m. upto the date of the Annual GeneralMeeting.

8. Members/Proxies holding their Shares in physical mode are requested to fillthe enclosed attendance slip and handover the same at the entrance withsignature. In the absence thereof, they may not be admitted to the meetingvenue.

9. Members who are holding shares in dematerialized form are requested to bringtheir Client ID and DP ID numbers for easy identification at the meeting.

10. In all correspondence with the Company, members are requested to quote theirFolio No. and in case their shares are held in Demat form, they must quotetheir Client ID and DP ID numbers.

11. Explanatory Statement pursuant to section 173(2) of the Companies Act, 1956in respect of items No. 5 -7 is annexed hereto.

LISTING REQUIREMENTS:As required under Clause 49 (IV) (G) (i) of the Listing Agreement, given beloware the details of the Director(s) who are seeking appointment/re-appointment asdirectors (Resolutions at Item Nos. 2 & 3):

A. Name : Mr. Ram Sanehi

Age : 73 [14.02.1938]

Qualifications : MA Sociology.

Mr. Ram Sanehi is associated with the Company since 03/03/2010. He is ExDirector Ministry of Commerce, Government of India and has an experienceof over 40 years. He provides guidance to the Company from time to time forincreasing the presence of the Company in the international market.

Other Directorships : Nil

Committee Memberships

Audit Committee Member : Rexnord Electronics and Controls Ltd.

Shareholders GrievanceCommittee Member : Rexnord Electronics and Controls Ltd.

Remuneration CommitteeMember : Rexnord Electronics and Controls Ltd.

No. of shares held in theCompany : Nil

Relationship with other directors

Kishore Chand Talwar : None

Ayyaswami Sundram : None

Nainy K. Tanna : None

B. Name : Mr. Ayyaswami Sundram

Age : 50 [18.01.1961]

Qualifications : MSC in Physics

Mr. Ayyaswami Sundram is associated with the Company since 03/03/2010.He has an experience of over 20 years as Business Innovation Consultant. Heprovides guidance to the Company from time to time in the field of overallProduct Quality management.

Other Directorships : Nil

Committee Memberships

Audit Committee Member : Rexnord Electronics and Controls Ltd.

Shareholders GrievanceCommittee Member : Rexnord Electronics and Controls Ltd.

Remuneration CommitteeMember : Rexnord Electronics and Controls Ltd.

No. of shares held in theCompany : Nil

Relationship with other directors

Kishore Chand Talwar : None

Ram Sanehi : None

Nainy K. Tanna : None



Place : MumbaiDated : 31st August, 2011

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EXPLANATORY STATEMENT PURSUANT TO SECTION 173 OF THE COMPANIES ACT, 1956

Item Nos. 7

Mrs. Sharda K. Talwar was appointed as a Vice President [Facilities] of theCompany w.e.f. March 3, 2010.

Mrs. Sharda K. Talwar is based at Mumbai. Mrs. Sharda K. Talwar has considerableexperience of over 30 years, the Board has decided to increase her remunerationas per amended provisions of the Companies Act, 1956 upto a consolidated Salarynot exceeding 2,50,000/- p.m. together with usual allowances, commission,benefits and perquisites.

The Selection Committee has also recommended the same.

As Mrs. Sharda K. Talwar is relative of Mr. Kishore Chand Talwar and Mrs. NainyK. Tanna, Directors of the Company, approval of members is sought under Section314 of the Companies Act, 1956.

In the interest of the Company, the Board recommends the resolution.

Mr. Kishore Chand Talwar and Mrs. Nainy K. Tanna, Directors may be deemed tobe concerned or interested in this resolution being related to Mrs. Sharda K. Talwar.None of the other Directors of the Company are concerned or interested in theresolution.




Item Nos. 5

Mr. Kundan K. Talwar was appointed as a Manager [Production] of the Companyw.e.f. April 1, 2009.

Mr. Kundan K. Talwar is based at Mumbai and look after overall productions ofthe Company at Vasai Factory.

Mr. Kundan K. Talwar is a B. Com., Diploma in Electronics and considering hisexperience of over 6 years and looking on his performance, the Board has decidedto increase his remuneration as per amended provisions of the Companies Act,1956 upto a consolidated Salary not exceeding 2,50,000/- p.m. together withusual allowances, commission, benefits and perquisites.


As Mr. Kundan K. Talwar is relative of Mr. Kishore Chand Talwar and Mrs. NainyK. Tanna, Directors of the Company, approval of members is sought under Section314 of the Companies Act, 1956.


Mr. Kishore Chand Talwar and Mrs. Nainy K. Tanna, Directors may be deemed tobe concerned or interested in this resolution being related to Mr. Kundan K. Talwar.None of the other Directors of the Company are concerned or interested in theresolution.

Item Nos. 6

Mr. Kunal Dilip Tanna was appointed as a Vice President [International Business]of the Company w.e.f. January 1, 2010.

Mr. Kunal Dilip Tanna is based at Mumbai and look after overall InternationalBusiness of the Company.

Mr. Kunal Dilip Tanna is a M. Com., MBA in HR and Mphil and currently pursuinghis PHD and considering his experience of over 11 years, the Board has decided toincrease his remuneration as per amended provisions of the Companies Act, 1956upto a consolidated Salary not exceeding 2,50,000/- p.m. together with usualallowances, commission, benefits and perquisites.


As Mr. Kunal Dilip Tanna is relative of Mr. Kishore Chand Talwar and Mrs. NainyK. Tanna, Directors of the Company, approval of members is sought under Section314 of the Companies Act, 1956.


Mr. Kishore Chand Talwar and Mrs. Nainy K. Tanna, Directors may be deemed tobe concerned or interested in this resolution being related to Mr. Kunal D. Tanna.None of the other Directors of the Company are concerned or interested in theresolution.

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DIRECTORS’ REPORT

CORPORATE GOVERNANCE:Your Company fully subscribes to the standards set out by the Securities AndExchange Board of India’s Corporate Governance practices and has ensuredcompliance of the conditions of Corporate Governance stipulated in Clause 49 ofthe Listing Agreement with the Stock Exchange. A separate report on CorporateGovernance together with Auditor’s Certificate on its compliance is included inthis Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:Pursuant to Section 217(2AA) of the Companies Act, 1956 the directors confirm that:i. In the preparation of the annual accounts, the applicable accounting standards

have been followed along with proper explanation relating to materialdeparture.

ii. Appropriate policies have been selected and applied consistently and judgmentsand estimates wherever made are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company as at March 31, 2011 andof the profit of the Company for that year.

iii. Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.

iv. The annual accounts have been prepared on a going concern basis.

CODE OF CONDUCT:The Company is committed to conduct its business in accordance with the applicablelaws, rules and regulations and highest standards of business ethics. In recognitionthereof, the Board of directors has implemented a Code of Conduct for adherence bythe Directors and Senior Management Personnel of the Company. This will help indealing with ethical issues and also foster a culture of accountability and integrity.

AUDITORS:M/s. R. S. Agrawal & Associates, Chartered Accountants, auditors of the Companyare retiring at the ensuing Annual General Meeting. They are eligible for re-appointment and have expressed their willingness to act as auditors, if re-appointed.The Company has received a certificate from them that they are qualified undersection 224 (1) of the Companies Act, 1956, for appointment as Auditors of theCompany. Members are requested to consider their appointment at a remunerationto be decided by the Board of Directors for the financial year ending March 31,2012 as set out in the Notice convening the Meeting.

AUDITORS’ OBSERVATIONS:As pointed out by the Statutory Auditors, the board hereby clarifies as under:

a. The Company is looking for professional directors to appoint them as directorsto compose the remuneration committee in conformity of requirement ofSchedule XIII of the Companies Act, 1956.

b. Regarding the appointment of whole-time Company secretary, the Company isin process of appointing a whole time Company Secretary. In the mean timethe Company is availing services of a practicing Company Secretary and hasobtained a certificate from him to the effect that the Company is complyingwith the applicable provisions of the Companies Act, 1956.

c. The statutory dues including excise duty and income tax are not paid on accountof disputes pending with respective authorities.

To,THE SHAREHOLDERS

Your Directors have great pleasure in presenting their 23rd Annual Report togetherwith the Audited accounts for the year ended March 31, 2011.

( in lacs)

Particulars Year ended Year ended31.03.2011 31.03.2010

Sales & Other Income

(Net of Excise duty and Sales Tax) 2759.00 2105.70

Profit before depreciation 160.25 99.40

Depreciation 55.37 53.55

Net Profit before tax 104.87 45.85

Net Profit after tax 68.03 31.20

Balance Brought Forward 108.43 77.23

Balance Carried Forward 176.46 108.43

OPERATIONS:The year under review remained better than previous year inspite of toughcompetition. The sales and other income of your Company, during the year underreview, remained at 2759.00 lacs as against sales and other income of 2105.70lacs in the previous year. Your Company has been able to earn net profit before taxof 104.87 lacs for the year as against the net profit before tax of 45.85 lacs inthe previous year. The board expects better results for the current year.

DIVIDEND:To consolidate the financial position of the Company, the Board does not proposeany dividend for the year ended March 31, 2011.

RESEARCH & DEVELOPMENT:The R&D department of the Company has been arduously working to providequality and value for money to the customer in keeping with market trends.

ISO CERTIFICATION:The Company’s products were awarded as DIN EN ISO 9001:2008 Certification.

FIXED DEPOSITS:Your Company has not accepted any deposit within the meaning of section 58A ofthe Companies Act, 1956 from the public and the rules made there under.

BOARD OF DIRECTORS:As per the provisions of the Companies Act, 1956 and in terms of the Articles ofAssociation of the Company, Mr. Ram Sanehi and Mr. Ayyaswami Sundram retireby rotation and being eligible offer themselves for reappointment.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:An analysis of the Company’s performance is discussed in the ManagementDiscussion and Analysis Report which forms part of this Directors Report.

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d. The Company has already appointed a firm of chartered accountants for internalaudit of the transactions of the Company. The Company is also planning to enlargethe scope of work of the internal auditors of the Company for the current year.

Other observations of the auditors contained in their report have been adequatelydealt with in the notes to accounts given in Schedule 20 which are self-explanatoryand, therefore, do not call for any further comments.

AUDIT COMMITTEE:In accordance with the provisions of the Companies Act, 1956 and Listing Agreementthe Company has constituted an Audit Committee. The Audit Committee acts inaccordance with the terms of reference specified from time to time by the Board.

DEPOSITORY SERVICES:The Company’s Equity Shares have been admitted to the depository mechanismof the National Securities Depository Limited (NSDL) and also the CentralDepository Services Limited (CDSL). As a result the investors have an option tohold the shares of the Company in a dematerialised form in either of the twoDepositories. The Company has been allotted ISIN No. INE687C01012.

Shareholders’ therefore are requested to take full benefit of the same and lodgetheir holdings with Depository Participants [DPs] with whom they have their DematAccounts for getting their holdings in electronic form.

PARTICULARS REGARDING CONSERVATION OF ENERGY,TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGAND OUTGO:The information pursuant to section 217 (I) (e) of the Companies Act, 1956 readwith the Companies (Disclosure of particulars in the Report of Board of Directors)Rules 1988 are given as under.

Efficient use of energy in all form has been a consistent corporate trust in theCompany. Better maintenance of equipments, improved operating practice andinstallation of most modern machinery has resulted in lot of saving in energy costand consumption of raw materials.

A. CONSERVATION OF ENERGY:The Company is consistently doing research in the field of saving energy byimplementing new cost-effective ideas. Form for disclosure of particulars withrespect of Consumption of Energy is enclosed herewith.

Units Current PreviousYear Year

a. Power & Fuel ConsumptionElectricity - Purchased

Unit (KWH) Units 817659 817575Total Amount In 5794558* 4879458*Average Rate per unit 7.09 5.97

*includes power charges 57,94,558/- ( 32,63,575/-)

for 8,17,659 Units (5,49,109 Units)for processing of goods directlypaid by the Company.

b. Consumption per unit ofproduction Electricity (KWH)Instrument Cooling Fans AC Units/Thousand 752 1003Instrument Cooling Fans DC Units/Thousand 188 251

B. TECHNOLOGY ABSORPTION:

a) Research & Development

The Research & Development department of the Company has been arduouslyworking to provide quality and value for money to the customer in keepingwith market trends. Research and Development is being carried out in thefollowing areas.

● Making design modifications in the products so as to simplify themanufacturing process and enhance productivity.

● Developing Jigs, Fixtures and devices to increase productivity.● Improvements to tool design.● Up gradation of machines.● Design and development of special machines required for increasing capacity.● Development of equipment required for testing product reliability at various

stages.

b) Technology absorption, adaptation and innovation.Technology for the manufacture of Instrument Cooling Fans of various sizeshas been successfully absorbed.

C. FOREIGN EXCHANGE EARNED AND USED:The particulars regarding foreign exchange earning and expenditure appear atitem nos. 23(II), 24 and 25 of the Schedule 20 to the accounts.

PARTICULARS OF EMPLOYEES:None of the employees of the Company came within the purview of the informationrequired u/s 217 (2A) of the Companies Act, 1956 read with the Companies(particulars of Employees) Rules, 1975 as amended.

LISTING:Shares of the Company are listed at the Stock Exchanges at Mumbai, Ahmadabad,Bangalore and Delhi. The Company has not paid the listing fees for Ahmadabad,Bangalore and Delhi Stock Exchanges since the Company is in process of gettingthe equity shares delisted from these stock exchanges.

SAFETY, ENVIRONMENTAL CONTROL AND PROTECTION:The Company has taken all the necessary steps for safety and environmental controland protection at the plant.

ACKNOWLEDGMENT:The Directors wish to convey their appreciation to the Company’s shareholders,customers, suppliers, bankers and distributors for the support they have given tothe Company and the confidence, which they have reposed in its management andthe employees for the commitment and dedication shown by them.

For and on behalf of the BoardREXNORD ELECTRONICS AND CONTROLS LIMITED


Place : MumbaiDated : 31st August 2011

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ANNEXURE TO DIRECTORS’ REPORTMANAGEMENT DISCUSSION AND ANALYSIS

and by the audit committee of the board and proper follow up action is ensuredwherever required. Regular audit committee meetings are held where statutoryauditors as well as internal auditors participate and internal audit reports arediscussed and reviewed.

The Statutory auditors have evaluated the system and procedures of internal controls ofthe Company and have reported the need to strengthen the same. The management hasappointed a firm of chartered accountants to carry out the internal audit of the transactionsof the Company and planning to enlarge the scope of work of the internal auditors.

FINANCIAL AND OPERATIONAL PERFORMANCE:During the year under review, the Company has achieved the sales and other incomeof 2759.00 lacs as against the sales and other income of 2105.70 lacs in theprevious year. The Company has earned net profit before tax of 104.87 lacs duringthe year as against the net profit before tax of 45.85 lacs in the previous year.

The challenges described above could not affect the Company much and your Companycould be able to register net profit of 68.03 lacs as against net profit of 31.20 lacslast year in spite of global recessionary trends. During the current financial year, theCompany is working towards further improvement in its profitability.

HUMAN RESOURCES:Development of skills and updating of knowledge are essential for continues growthof any organization. Your Company considers human resources as a key asset.Therefore, your Company not only implemented many in house training programsbut also sent selected employees to suitable outside programs to keep them abreastof the latest developments in the industry and economy.

To establish direct link between performance and reward, your Company has beensteadily increasing the weightage of actual performance in remuneration packages.

The Company has, under its employment 24 officers and other staff.

CAUTIONARY STATEMENT:Statement in the Management Discussion and Analysis describing the Company’sobjectives, expectations, estimates or predictions may be forward looking withinthe meaning of applicable securities laws and regulations. Actual results may differmaterially from those expressed in the statement. Important factors that couldinfluence the Company’s operations include global and domestic supply anddemand conditions affecting selling prices of finished goods, input availabilityand prices, changes in Government regulations, tax laws, economic developmentswithin the country and other incidental factors. The Company assumes noresponsibility to publicly amend, modify or revise any forward-looking statements,on the basis, of any subsequent developments, events or information.

INDUSTRY STRUCTURE & DEVELOPMENT:The main business of the Company is manufacturing and sale of instrument coolingfans, exhaust fans and motors used in industrial and domestic purposes. The industryis directly related to the growth of the user industry in which the products findapplications. The instrument cooling fans /motors are mainly used in the computerhardware equipments, power supply equipments, textile machines, refrigerationindustry, injection molding machines, photocopying machines etc.

OPPORTUNITIES, THREATS, OUTLOOK, RISKS AND CONCERNS:In spite of continuance of global recessionary trends during the year under review,your Company could not be much affected due to quality of its products.

The Company is experiencing pressure on margins due to immense competitionfrom international competitors. However the Company is confident of adequatelyprotecting its plans from the competition.

There is also pressure from rising cost of manufacturing of the products likemanpower costs, processing charges and rent etc. These are risks and matter ofconcern and may affect the profitability of the Company.

The general outlook with respect to this industry in India is of caution underimmense competitive pressure. However the intrinsic strength of your Companyhas helped us to effectively overcome such pressure and the sales therefore shouldregister a modest but definite growth.

The Company is regularly investing in modernization and up-gradation of itsproduction facilities which poised the Company to take maximum advantage ofdemand of its products.

The Company’s operations are predominantly comprises of only one businesssegment -Instrument Cooling Fans/ Motors.

EXPORTS:The Company is holding DIN EN ISO 9001:2008 Certificate by TUV NORDCERT GmbH for its quality systems which reflects your Company’s continuouscommitment towards quality & standards. During the year under review yourCompany achieved export turnover of around 13.84% of total sales as against theexport turnover of around 8.09% of the total sales in the previous year. TheCompany is putting its best efforts to increase the export. The Company isconsolidating its resources to build a market presence in the international arena.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:Internal Control Systems are designed to ensure the reliability of financial andother record and accountability of executive action to the management’sauthorization. The internal control systems are reviewed by the top management

REPORT ON CORPORATE GOVERNANCE

A) MANDATORY REQUIREMENTS

1. COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCE:REXNORD ELECTRONICS AND CONTROLS LIMITED (“theCompany”) is committed to adhere to the corporate governance code asprescribed by the SEBI and Stock Exchange and has accordingly implementedvarious aspects of the code.

To implement the Corporate Governance practice, Rexnord Electronics And

Controls Limited has a well defined policy which:

● Ensures that the Quality and frequency of Financial and ManagerialInformation’s, which the Management shares with the Board, fully placed beforethe Board Members in control of the Company’s affairs.

● Ensures that the Board exercises its Fiduciary responsibilities towardsShareowners and Creditors, thereby ensuring high accountability.

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● Any materially significant effluent or pollution problem.● Any material default in financial obligations to and by the Company. Any

issue which involves possible public or product liability claims of a substantialnature.

● Details of any joint venture of collaboration agreement.● Transactions that involve substantial payment towards goodwill, brand equity

or intellectual property.● Significant development in the human resource and industrial relations fronts.● Sale of material nature of investments and assets which is not in the normal

course of business.● Foreign exchange exposure and the steps taken by the management to limit

the risk of adverse exchange rate movement.● Non-compliance of any regulatory, statutory or listing requirements and share-

holders service such as non-payment of dividend, delay in share transfer etc.

The Board is routinely presented with all information under the above headswhenever applicable and materially significant. These are submitted either as partof the agenda of board meeting or are placed during the course of the meeting.

As mandated by the revised Clause 49, the independent directors on the board ofthe Company:

● apart from receiving Director’s remuneration, do not have any materialpecuniary relationships or transactions with the Company, its promoters, itsDirectors, its senior management or its holding company, its subsidiaries andassociates that may affect independence of the director;

● are not related to promoters or persons occupying management positions atthe board level or at one level below the board;

● have not been an executive of the Company in the immediately precedingthree financial years;

● are not partners or executives or were not partners or executives during thepreceding three financial years of any of the following:

- Statutory audit firm or the internal audit firm that is associated with theCompany; and

- Legal firm(s) and consulting firm(s) that have a material association withthe Company.

● are not material suppliers, services providers or customers or lessors or lesseesof the Company, which may affect their independence;

● are not substantial shareholders of the Company i.e. do not own two percentor more of the block of voting shares.

3. COMMITTEES OF BOARD:To focus effectively on the issues and ensure expedient resolution of the diversematters, the Board has constituted a set of Committees of independent Directorswith specific terms of reference / scope. The committee operates as empoweredagents of the board. The inputs and details required for the decision is provided bythe operating managers. The Minutes of the Meeting of the all Committees of theboard are placed before the board for discussions / noting.

Details of the committee of the board and other related information are as follows:

3.1 AUDIT COMMITTEE:The Company has a qualified and independent Audit Committee comprising ofthree Directors. Two members of the committee are independent and non executivedirectors and one member is executive director. All the members have financialand accounting knowledge and have related financial management expertise. Thebroad terms of reference of the Audit Committee are in consonance with the

● Ensures that the extent to which the information is disclosed to present andpotential investors is maximized.

● Ensures that the decision-making is transparent and documentary evidence istraceable through the minutes of the meetings of the Board/Committees thereof.

● Ensures that the Board, the Management, the Employees and all the otherstakeholders are fully committed to maximizing long-term value to theshareowners and to the Company.

● Ensures that the core values of the Company are protected.

● Ensures that the Company positions itself from time to time to be at par withany other world-class Company in operating practices.

2. BOARD OF DIRECTORS:The Company presently has four directors. Two of the directors are executive directorsand the other two are non executive directors. The Executive directors are comprisedof the Chairman and Managing Director and a whole time Director. The two nonexecutive directors are independent directors and professionals with expertise andexperience in general corporate management, finance and other allied fields.

As per clause 49 of the Listing Agreement, if the Chairman is an ExecutiveChairman at least half of the board should consist of non executive directors andhalf of the Board shall comprise of independent directors. In case of RexnordElectronics and Controls Limited, One half of the directors are non executive.Two out of the four directors are independent and non executive directors, whichis very much in compliance of the Listing Agreement.

Composition of the Board of Directors has a healthy mix of Executive & NonExecutive Directors and ensures the desired level of independence, functioningand decision making.

The details of composition of the Board, Category, attendance of directors at boardmeetings and last Annual General Meeting, number of other directorships andother committee memberships are given below:

Name of Director Designation Category No. of Attendence No. of other No. of outsideBoard Meeting at last companies in which committee

attended AGM directorships is held position held

Public Private Mem. Chmn

Mr. K. C. Talwar CMD Executive 12 YES — — — —

Mrs. Nainy K. Tanna WTD Executive 12 YES — — — —

Mr. Ram Sanehi Director Non Executiveand Independent 12 NO — — — —

Mr. Ayyaswami Director Non ExecutiveSundaram and Independent 12 YES — — — —

CMD stands for Chairman & Managing Director.WTD stands for Wholetime Director

During the financial year ended March 31, 2011, 12 [twelve] board meetings wereheld on 19/04/2010, 14/05/2010, 15/05/2010, 4/6/2010, 29/6/2010, 31/7/2010,14/8/2010, 30/8/2010, 3/11/2010, 18/12/2010, 31/12/2010, 11/2/2011.

INFORMATION SUPPLIED TO BOARD:Among others, this includes:● Review of annual operating plans of business, capital budgets and updates.● Quarterly results of the Company and its operating units● Minutes of meeting of audit committee and other committees.● Information on recruitment and remuneration of senior officers just below the

board level.● General notices of interests.● Materially important show cause, demand, prosecution and penalty notices.● Fatal or serious accidents or dangerous occurrences.

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provisions of Section 292A of the Companies Act, 1956 and Clause 49 of theListing Agreement.

The Committee acts as a link between the Management, the Internal Auditors, theStatutory Auditors and the Board of Directors of the Company. The Committeefocus its attention on monitoring the financial reporting system within the Company,considering quarterly & Annual Financial Results of the Company and submittingits observations to the Board of Directors before its adoption by the Board, reviewof internal control system, audit methodology and process, major accountingpolicies and practice, compliance with accounting standards. Committee alsoreviews the legal compliance reporting system.

The Senior Manager – Finance of the Company and the representative of the internaland statutory auditors is always invited to attend these meetings.

The role of Audit Committee includes the following:● To investigate into any matter referred to it by the Board and for that purpose

to have full access to the information contained in the records of the Companyand external professional advice, if necessary.

● To investigate any activity within its terms of reference.● Oversight of the Company’s financial reporting process and the disclosure of

its financial information to ensure that the financial statement is correct,sufficient and credible.

● To recommend the board the appointment, reappointment and if requiredreplacement of statutory auditors and fixation of audit fee and also approvalfor payment of any other services.

● Reviewing with management the annual and quarterly financial statementsbefore submission to the Board.

● Reviewing with management, performance of statutory and internal auditors,and the adequacy of internal control systems.

● To recommend the board the appointment, removal and terms of remunerationof internal auditors and review of adequacy of internal audit function.

● Discussion with internal auditors any significant finding and follow up thereon.● Reviewing the Company’s financial and risk management policies.● To look into the reasons for substantial defaults in the payment to the depositors,

debenture holders, shareholders (in case of non-payment of declared dividends)and creditors.

● Discussion with statutory auditors before the audit commences, about the natureand scope of audit as well as post-audit discussions to ascertain any areas ofconcern.

There were 5 [five] meetings of the committee during the year. The names ofmember of committee and their attendance are as follows:

Name of the Members Status No. of Meetings attendedMr. Ayyaswami Sundram Chairman 5

Mr. Ram Sanehi Member 5

Mrs. Nainy K. Tanna Member 5

The Company is in process of appointing a whole time Company Secretary to actas Secretary to the Committee.

3.2. REMUNERATION & REMUNERATION COMMITTEE:The Company has set up a Remuneration Committee as required under theprovisions of the Companies Act, 1956 and all matters relating to review andapproval of compensation payable to the executive and non executive directorsare considered by the Remuneration Committee and necessary recommendationsare made by the Committee to the Board for the approval within the overall limitsapproved by the Members and as per Schedule XIII to the Companies Act, 1956.

The Company pays remuneration to its Chairman and Managing Director and itsWhole time Directors by way of Salary, perquisites and allowances. Salary is paidwithin the range as approved by the Shareholders and as per Schedule XIII to theCompanies Act, 1956. The Board approves all the revisions in salary, perquisitesand allowances subject to the overall ceiling prescribed by Section 198 and 309 ofthe Companies Act, 1956.

The names of member of committee and their attendance are as follows:

Name of the Members Status No. of meetings AttendedMr. Ayyaswami Sundram Chairman 1



The details of remuneration paid to executive directors during the financial year2010-11 are given below:

Particulars Mr. Kishore Mrs. NainyChand Talwar K. Tanna

Salary ( ) 3,00,000/- 3,00,000/-Allowances & Perquisites ( ) 11,64,000/- 11,64,000/-Bonus Nil NilPension Nil NilFixed Components:Contribution to Provident Fund ( ) 36,000/- 36,000/-Performance linked Incentive Nil NilCommission Nil NilService Contract 5 Years 5 YearsSeverance Fees Nil NilStock Options Nil NilTotal ( ) 15,00,000/- 15,00,000/-

The details of remuneration paid to non executive directors during the financialyear 2010-2011 are given below:

Particulars Mr. Ram Sanehi Mr. AyyaswamiSundram

Sitting Fees ( ) 60,000/- 60,000/-Shareholding in the Company —— ——

3.3. SHAREHOLDERS GRIEVANCE COMMITTEE:The Company has constituted a Shareholders Grievance Committee at board levelto strengthen the investor relations and to inter-alia look into issues relating toshareholders grievances pertaining to transfer of shares, non receipt of declareddividends, non receipt of annual report, issues concerning dematerialization etc.The Shareholders Grievance Committee met 5 [five] times during the year endedMarch 31, 2011.

The composition of the Shareholders Grievance Committee and details of themeetings attended by the Directors are given below:

Name of the Members Status No. of Meetings attendedMr. Ayyaswami Sundram Chairman 5



9

(vi) The financial statements of the Company are qualified. It is always thecompanies endeavor to present unqualified financial statements and Companyis moving towards a regime of unqualified financial statements.

(vii) The Company has a periodic review and reporting to the Board of Directorsof the Company of risk assessment by senior executives with a view tominimize risk.

(viii) Certificate from Mr. Kishore Chand Talwar, Managing Director in terms ofclause 49 (V) of the listing agreements with the stock exchanges for thefinancial year ended 31st March 2011 was placed before the board of directorsof the Company in its meeting held on 31st August, 2011.

6. MEANS OF COMMUNICATION(i) Quarterly results are submitted to the stock exchanges where the shares of

the Company are listed.

(ii) All items required to be covered in the Management Discussion and Analysishas been included in the Annexure to the Directors’ Report.

(iii) No formal presentations were made to the institutional investors and analystsduring the year under review.

(iv) The Company has its own website i.e. www.rexnordindia.com and all thevital information relating to the Company and its products are displayed onthe web site.

7. GENERAL SHAREHOLDERS INFORMATION:

7.1. ANNUAL GENERAL MEETING : 23rd Annual General Meeting.DAY & DATE : Friday, September 30, 2011.TIME : 11.00 A.M.VENUE : Registered Office.

7.2. FINANCIAL CALENDAR:* Financial reporting for the quarter ended June 30, 2011 : Mid of Aug., 2011* Financial reporting for the quarter ended Sept.30, 2011 : Mid of Nov., 2011* Financial reporting for the quarter ended Dec. 31, 2011 : Mid of Feb., 2012* Financial reporting for the year ended March 31, 2012 : Mid of May, 2012* Annual General Meeting for the year ended Mar 31, 2012 : End of Sep., 2012

7.3. DATE OF BOOK CLOSURE: 28/09/2011 TO 30/09/2011[Both days inclusive].

7.4. LISTING:The Stock Exchange, Mumbai.The Stock Exchange, Ahmedabad.The Stock Exchange, Bangalore.The Stock Exchange, Delhi.

7.5. STOCK CODE OF THE COMPANY : The Stock Exchange, MumbaiScrip Name : Rexnord Electronics and Controls Ltd.Scrip Code : 531888Electronic Mode : INE687C01012

Mr. Anand Patkar, Senior Manager – Finance is the compliance officer and attendedall the meetings of the Shareholders’ Grievances Committee held during the yearended March 31, 2011.

Details of Investors Complaints received during the year:

Sr. No. Nature of Complaints Received Disposed Off Pending1. Non Receipt of Share

Certificates after transfer 4 4 Nil2. Non Receipt of Demat

Rejected S/C’s 1 1 Nil3. Others 2 2 Nil

Total 7 7

There were no shares pending for transfer as on 31st March 2011.

4. GENERAL BODY MEETINGS:The last three Annual General Meetings were held as under:

Financial Year Date Time Venue

31.03.2010 30.09.2010 11.00 A.M. Registered Office31.03.2009 26.09.2009 1.00 P.M. — As above —31.03.2008 29.09.2008 11.00 A.M. — As above —

All the matters as set out in the respective notices were passed by the shareholders.No special resolution was required to be put through postal ballot at last AnnualGeneral Meeting nor is proposed for ensuing Annual General Meeting.

5. DISCLOSURES:(i) During the year, the Company did not enter into any materially significant

related party transactions with its promoters, directors, management or theirrelatives etc. that may have a potential conflict with the interests of theCompany at large. However the related party transactions are disclosed innote nos. 14 of Schedule 20 to the accounts.

(ii) No funds have been raised through issue of equity or debt in the form ofpublic or rights or preferential issues during the year under review.

(iii) A brief resume, nature of expertise in specific functional areas, names ofcompanies in which the person already hold directorship and membership ofcommittees of the Board and his shareholding in the Company forms part ofthe notice of the Annual General Meeting, annexed to this Annual Report forthe directors seeking appointment/ reappointment.

(iv) The Company has complied with the requirements of the Stock Exchanges,SEBI and other Statutory Authority on all matters relating to capital marketsduring the last three years. No penalties or strictures were imposed on theCompany by any Stock Exchange or SEBI or any other statutory authorityon any matter related to capital market during last three years.

(v) Though there is no formal Whistle Blower Policy, the Company takescognizance of complainants made and suggestions given by the employeesand others. Even anonymous complaints are looked into and whenevernecessary, suitable corrective steps are taken. No employees of the Companyhave been denied access to the Audit Committee of the Board of Directors ofthe Company.

10

7.13. DISTRIBUTION OF SHAREHOLDING AS ON 31ST MARCH, 2011:

No. of Equity No. of No. of Shares % of EquityShares held Shareholders held CapitalUpto 500 3980 657124 10.1389501-1000 373 321841 4.96581001-2000 154 244826 3.77752001-3000 71 185106 2.85603001-4000 29 106911 1.64964001-5000 24 114500 1.76665001-10000 27 180759 2.789010001 & above 42 4670133 72.0566Total 4700 64,81,200 100.00

7.14. DEMATERIALISATION OF SHARES:

As on March 31, 2011, 53,96,280 shares representing 83.26% of total equityshares were held in dematerialized form with NSDL and CDSL.Member can hold shares in electronic forms and trade the same in DepositorySystem. However, they may hold the same in physical form also.

7.15 OUTSTANDING GDRs / ADRs / WARRANTS OR ANY CONVERTIBLEINSTRUMENTS:

The Company has not issued any GDRs / ADRs / Warrants or any other convertibleinstruments.

7.16. WORKS:Unit No. 12-15, Sarswati Building,Tungareshwar Industrial Estate,Sativali, Vasai (East), Thane

7.17. ADDRESS FOR CORRESPONDENCE:REXNORD ELECTRONICS AND CONTROLS LIMITED92-D, Govt. Industrial Estate, Charkop,Kandivli [West], Mumbai - 400 067Telephone Nos: 2868 3087 / 2868 4715

7.18. COMPLIANCE:A certificate has been obtained from the Statutory Auditors of the Companyregarding compliance of conditions of Corporate Governance and is attached tothis report. The Company is in process of complying with the some of the conditionsof corporate governance.

8. CODE OF CONDUCT FOR BOARD MEMBERS AND SENIORMANAGEMENT:

The board of directors has laid down the Code of Conduct for all the board membersand members of senior management of the Company. Certificate from the ManagingDirector affirming compliance of the said code by all the board members andmembers of senior management of the Company to whom the code is applicable isannexed separately to this report.

9. STEPS FOR PREVENTION OF INSIDE TRADINGIn compliance of the SEBI (Prevention of inside Trading) Regulations as amendedin 2002, the Company has issued a comprehensive guidelines advising and

7.6 STOCK PRICES DATA & PERFORMANCE IN COMPARISION TOBSE SENSEX: [AS OBTAINED FROM BSE WEBSITE]

Company’s Share BSE SensexMonth High ( ) Low ( ) High LowApril, 2010 9.24 7.61 18,047.86 17,276.80May, 2010 9.35 7.33 17,536.86 15,960.15June, 2010 10.30 8.12 17,919.62 16,318.39July, 2010 9.40 8.00 18,237.56 17,395.58August, 2010 11.30 8.37 18,475.27 17,819.99Sept., 2010 12.90 10.00 20,267.98 18,027.12October, 2010 16.50 9.56 20,854.55 19,768.96November, 2010 14.25 10.54 21,108.64 18,954.82December, 2010 12.55 8.51 20,552.03 19,074.57January, 2011 10.95 8.08 20,664.80 18,038.48February, 2011 10.68 8.00 18,690.97 17,295.62March, 2011 10.29 7.16 19,575.16 17,792.17

7.7. REGISTRAR & TRANFER AGENTS UNDER PHYSICAL ANDDEMAT MODE:M/S. Big Share Services Private Limited,[Unit: Rexnord Electronics And Controls Limited]E/2, Ansha Industrial Estate, Sakivihar Road,Saki Naka, Andheri [East], Mumbai - 400 072

7.8. SHARE TRANSFER SYSTEM:Share transfer requests are received at the registered office of the Company as wellas directly at RTA’s office. RTA does the verification and processing of documents.In order to comply with the requirements of SEBI’s circular Nos. SMD/POLICY/CIR-10/02 dated May 7, 2002 to effect transfer of shares within one month, theRTA has been authorized to process, approve and effect transfer of shares on behalfof the Company at fortnightly intervals. The share certificates duly endorsed fortransfer are returned to shareholders within stipulated time of 30 days.

The turnaround time for completion of transfer of shares in physical mode isgenerally 15 days, if the documents are clear in all respects.

7.9. COMPLIANCE OFFICER:Mr. Anand Patkar, Senior Manager - Finance

7.10. DEPOSITORY CONNECTIVITY: NSDL and CDSL.

7.11. ISIN NO. FOR THE COMPANY’S SECURITY: INE687C01012.

7.12 SHAREHOLDING PATTERN AS ON 31ST MARCH, 2011:Category No. of shares held % of shareholdingPromoters & Promoter Group 28,25,771 43.60Mutual Funds /UTI NIL NILFinancial Institutions / Banks 2,000 0.03Bodies Corporate 1,60,462 2.48Indian Public 31,80,867 49.08NRI / OCBs 3,12,100 4.81Total 64,81,200 100.00

11

cautioning management staff and other relevant business associates on the procedureto be followed while dealing in equity shares of Company and disclosurerequirements in this regard. Company believes that “The Code of Internal Procedureand Conduct” and ‘The Code of Corporate Disclosures Policies’ framed by it inthis regard will help in ensuring compliance of the amended SEBI regulations.

B) NON-MANDATORY REQUIREMENTS1. CHAIRMAN OF THE BOARD:

The Company has an Executive Chairman and hence the requirement pertainingto reimbursement of expenses to a non-executive chairman does not arise.

2. REMUNERATION COMMITTEE:Please refer item no. 3.2 under Mandatory Requirements.

3. SHAREHOLDERS RIGHTS:The Company furnishes the quarterly and half yearly results on receipt of arequest from the shareholders.

4. POSTAL BALLOT:The provision relating to Postal Ballot will be complied with in respect of matters,wherever applicable.

5. TRAINING OF BOARD MEMBERS:Directors are fully briefed about all business related matters risks assessmentmarket conditions of the product manufactured by the Company, competitionand new initiative proposed by the Company.

For and on Behalf of the Board REXNORD ELECTRONICS AND CONTROLS LIMITED

Kishore Chand TalwarChairman & Managing Director

Place : Mumbai.Dated : 31st August, 2011

c. I accept the responsibility for establishing and maintaining internal controlsand I have evaluated the effectiveness of the internal control systems of theCompany pertaining to financial reporting and I have disclosed to the Auditorsand the Audit Committee, deficiencies in the design or operation of internalcontrols, if any, of which I am aware and the steps taken or propose to take torectify these deficiencies.

d. I have indicated, based on my most recent evaluation, wherever applicable,to the Auditors and the Audit committee

(i) significant changes in internal control over financial reporting duringthe year;

(ii) significant changes in accounting policies during the year and that thesame have been disclosed in the notes to the financial statements; and

(iii) instances of significant fraud of which I have become aware and theinvolvement therein, if any, of the management or an employee havinga significant role in the Company’s internal control system over financialreporting.

Kishore Chand TalwarManaging Director

Place : Mumbai.Dated : 31st August, 2011

The Board of DirectorsRexnord Electronics and Controls Limited92-D, Govt. Industrial Estate,Charkop, Kandivli (West),Mumbai – 400 067

I, the undersigned, in my capacity as Chief Executive Officer of RexnordElectronics and Controls Limited (“the Company”), to the best of my knowledgeand belief certify that:

a. I have reviewed the financial statements and the cash flow statement of theCompany for the year ended March 31, 2011 and that to the best of myknowledge and belief :

(i) these statements do not contain any materially untrue statement or omitany material fact or contain statement that might be misleading;

(ii) these statements present a true and fair view of the Company’s affairsand are in compliance with existing accounting standards, applicablelaws and regulations.

b. There are, to the best of my knowledge and belief, no transactions enteredinto by the Company during the year which are fraudulent, illegal or violativeof the Company’s code of conduct.

ANNEXURE TO CORPORATE GOVERNANCE REPORTDeclaration regarding affirmation of Code of ConductIn terms of the requirements of the amended clause 49 I (D) (ii) of the listing agreement, this is to confirm that all the members of the Board and the senior managerialpersonnel have affirmed compliance with the code of conduct for the year ended 31st March 2011.

Kishore Chand TalwarChairman & Managing Director


CERTIFICATIONBY CHIEF EXECUTIVE OFFICER / CHIEF FINANCIAL OFFICER

12

AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE

followings:a. The Company does not have the whole time company secretary to act as

secretary to the Audit Committee;b. The code of conduct has not been posted on the website of the Company.

We further state that such compliance is neither an assurance as to the futureviability of the Company nor the efficiency or effectiveness with which themanagement has conducted the affairs of the Company.

For R. S. AGRAWAL & ASSOCIATESChartered Accountants

Firm Registration No. 100156W

O. P. AgrawalPartner

M. No. 045862


AUDITORS’ REPORT

e) based on the representations made by the directors of the Company andtaken on record by the Board of Directors of the Company, we report thatnone of the directors is disqualified as at 31st March 2011 from beingappointed as director in terms of clause (g) of sub section (1) of Section274 of the Act;

f) Attention of the members is invited that the composition of theremuneration committee, is not in conformity with the requirements ofSchedule XIII to the Companies Act, 1956;

g) Subject to the forgoing, in our opinion and to the best of our informationand according to the explanations given to us, the said accounts readtogether with the significant accounting policies and other notes thereon,give the information required by the Act, in the manner so required andgive a true and fair view in conformity with the accounting principlesgenerally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Companyas at 31st March, 2011;

ii) in the case of the Profit and Loss Account, of the profit for the yearended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the yearended on that date.

For R.S. AGRAWAL & ASSOCIATES Chartered Accountants



M. No. 045862


ToThe MembersREXNORD ELECTRONICS AND CONTROLS LIMITED,

We have examined the compliance of conditions of Corporate Governance byREXNORD ELECTRONICS AND CONTROLS LIMITED (‘the Company’) forthe year ended on 31st March, 2011 as stipulated in clause 49 of the ListingAgreement of the said Company with Stock Exchange(s).

The compliance of conditions of Corporate Governance is the responsibility of themanagement. Our examination was limited to procedures and implementationthereof, adopted by the Company for ensuring the compliance of the conditions ofthe Corporate Governance. It is neither an audit nor an expression of opinion onthe financial statements of the Company.

In our opinion and to the best of our information and according to the explanationsgiven to us and the representation made by the directors and management, wecertify that the Company has complied with the conditions of Corporate Governanceas stipulated in clause 49 of the abovementioned Listing Agreement subject to

ToThe MembersREXNORD ELECTRONICS AND CONTROLS LIMITED

1) We have audited the attached Balance Sheet of REXNORD ELECTRONICSAND CONTROLS LIMITED (‘the Company’) as at 31st March 2011 andalso the Profit and Loss Account and the Cash Flow Statement of the Companyfor the year ended on that date, annexed thereto. These financial statementsare the responsibility of the Company’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generallyaccepted in India. Those standards require that we plan and perform the auditto obtain reasonable assurance about whether the financial statements are freeof material misstatement. An audit includes examining, on test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimatesmade by the management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for ouropinion.

3) As required by the Companies (Auditors’ Report) Order 2003 (‘the Order’),issued by the Central Government of India in terms of sub-section (4A) ofsection 227 of the Companies Act, 1956 (‘the Act’), we give in the Annexurea statement on the matters specified in the paragraph 4 and 5 of the said Order.

4) Further to our comments in the Annexure referred to in paragraph 3 above, wereport that:

a) we have obtained all the information and explanations which, to the bestof our knowledge and belief, were necessary for the purpose of our audit;

b) in our opinion, proper books of account as required by law have beenkept by the Company so far as appears from our examination of those books;

c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statementdealt with by this report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, the Profit and Loss Account and theCash Flow Statement dealt with by this report comply with the accountingstandards referred to in sub section (3C) of Section 211 of the Act;

13

ANNEXURE TO THE AUDITORS’ REPORT

ANNEXURE REFERRED IN PARAGRAPH (3) OF AUDITORS’ REPORT OFEVEN DATE ON THE ACCOUNTS OF REXNORD ELECTRONICS ANDCONTROLS LIMITED FOR THE YEAR ENDED 31ST MARCH, 2011 ON THEBASIS OF SUCH CHECKS/TEST CHECKS AS WE CONSIDERAPPROPRIATE AND IN TERMS OF THE INFORMATION ANDEXPLANATIONS GIVEN TO US, WE STATE THAT: -

1. (i) the Company has maintained records, showing particulars includingquantitative details and situation of its fixed assets;

(ii) as explained to us, all the fixed assets have been physically verified by themanagement at reasonable intervals during the year. We were informedthat no material discrepancy have been noticed by the management on suchverification as compared to the aforesaid records of fixed assets; and

(iii) there was no substantial disposal of fixed assets during the year.

2. (i) as certified by the management, physical verification was conducted by themanagement at the close of the year in respect of finished goods, stores,spare parts and raw materials;

(ii) the procedures of physical verification of stocks followed by the managementare, in our opinion, need to be strengthened in relation to the size of theCompany and the nature of its business; and

(iii) the Company is maintaining records of inventory. As certified by themanagement, there were no material discrepancies noticed on physicalverification of stocks as compared to book records and the same have beenproperly dealt with in the books of account.

3. the Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained undersection 301 of the Act. Accordingly the provisions of sub clauses (b), (c) (d), (f)and (g) of the clause 4 (iii) of the Order are not applicable to the Company.

4. on the basis of selective checks carried out during the course of audit, we are ofthe opinion that the internal control system followed by the Company need tobe strengthened commensurate with the size of the Company and nature of itsbusiness for purchase of inventory and fixed assets and for the sale of goods. Asinformed to us, the Company has initiated steps to ensure strengthening suchcontrols.

5. (i) in our opinion, the particulars of contracts and arrangements referred to insection 301 of the Act, have been entered in the register required to bemaintained under that section; and

(ii) in our opinion and according to information and explanation given to us,there were no transactions made in pursuance of the contracts or arrangementsentered in the register required to be maintained under section 301 of theAct, exceeding the value of 5.00 lacs in respect of any party during the year.

6. as explained to us, the Company has not accepted any deposit from public.

7. the Company has, during the year, appointed a firm of Chartered Accountantsto carry out the internal audit of the transactions of the Company. However, thescope and coverage of which, in our opinion, required to be enlarged to becommensurate with the size and nature of its business.

8. we are informed that the cost records prescribed by the Central Governmentunder Section 209 (1) (d) of the Act, are under preparation. Hence for wantof such records, we are unable to comment on the same.

9. (i) on the basis of books and records examined by us, undisputed statutory duesincluding Provident Fund, Investor Education and Protection Fund,Employees State Insurance (ESI), Income Tax, Sales Tax, Wealth Tax,Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues havegenerally been regularly deposited with the appropriate authorities thoughthere has been a slight delay in few cases. There are no arrears of undisputedstatutory dues as at the last day of financial year concerned, outstandingfor a period of more than six months from the date they became payable; and

(ii) on the basis of books and records examined by us, the statutory duesoutstanding on account of any dispute are as follows:

Name of Statute Nature of Dues Amount ( ) Period to which Forum where disputethe amount relates is pending

The Income Tax Act Non Credit of TDS 47,308/- 2006-07* Rectification Applicationwith the Assessing Officer

The Income Tax Act Interest on Fringe 13,430/- 2007-08* Rectification ApplicationBenefit Tax with the Assessing Officer

The Central Excise Act Excise Duty, 31,000/-** 1999-00 The Custom, Excise, &Penalty and Fine Service Tax Appellate

Tribunal

*Assessment Year** net of 2,59,005/- paid

10. the Company has neither accumulated losses at the end of the financial yearnor has it incurred cash losses, both in the financial year under report and inthe immediately preceding financial year.

11. on the basis of selective checks carried out during the course of audit, we are ofthe opinion that the Company has not defaulted in the repayment of dues tobanks. There are no dues payable to the financial institutions and debentureholders.

12. the Company has not granted loans and advances on the basis of security byway of pledge of shares, debentures and other securities. Therefore provisionsof clause 4 (xii) of the Order are not applicable to the Company.

13. in our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society.Therefore provisions of clause 4 (xiii) of the Order are not applicable to the Company.

14. in our opinion, the Company is not dealing or trading in shares, securities,debentures and other investments. Therefore provisions of clause 4 (xiv) of theOrder are not applicable to the Company.

15. the Company has not given any guarantee for loans taken by others from banksor financial institutions. Therefore provisions of clause 4 (xv) of the Order arenot applicable to the Company.

16. in our opinion, the term loans were applied for the purpose for which the loanswere obtained.

17. on the basis of an overall examination of the balance sheet of the Company, weare of the opinion that funds raised on short term basis have not been utilizedfor long term investment.

18. the Company has not made any preferential allotment of shares to parties andcompanies covered in the register maintained under Section 301 of the Act,during the year. Therefore provisions of clause 4 (xviii) of the Order are notapplicable to the Company.

19. the Company did not have any outstanding debenture during the year. Thereforeprovisions of clause 4 (xix) of the Order are not applicable to the Company.

20. the Company has not raised any money through a public issue during the year.Therefore provisions of clause 4 (xx) of the Order are not applicable to the Company.

21. based on the audit procedures performed and the information and explanationsgiven to us by the management, we report that no fraud on or by the Companyhas been noticed or reported during the course of our audit.

For R. S. AGRAWAL & ASSOCIATESChartered Accountants



M. No. 045862Place : Mumbai.Dated : 31st August, 2011

14

BALANCE SHEET AS AT 31ST MARCH, 2011

Schedules As at As at31-03-2011 31-03-2010

SOURCES OF FUNDSSHARE HOLDERS’ FUND

Share capital 2 64803000.00 64803000.00Reserves and surplus 3 17647066.54 10843751.24

82450066.54 75646751.24LOAN FUNDS

Secured loans 4 28323218.17 10515473.71Unsecured loans 5 34252999.00 19499852.85

62576217.17 30015326.56

DEFERRED TAX LIABILITY (NET) 6 2383993.00 2769504.00

TOTAL 147410276.71 108431581.80

APPLICATION OF FUNDSFIXED ASSETS 7

Gross block 133625819.60 126909485.85Less: depreciation 87194502.84 82535778.22Net block 46431316.76 44373707.63Add : capital work in progress 32851310.66 10003610.50

79282627.42 54377318.13

INVESTMENTS 8 106380.00 116380.00

CURRENT ASSETS, LOANS AND ADVANCESInventories 9 49146822.26 44068259.73Sundry debtors 10 45063330.90 37689636.12Cash and bank balances 11 14640672.94 22457679.71Loans and advances 12 18700187.91 18096830.63

127551014.01 122312406.19Less: CURRENT LIABILITIES AND PROVISIONS

Current liabilities 13 53432743.72 63156316.52Provisions 14 6097001.00 5218206.00

59529744.72 68374522.52

NET CURRENT ASSETS 68021269.29 53937883.67

TOTAL 147410276.71 108431581.80

SIGNIFICANT ACCOUNTING POLICIES 1

NOTES TO ACCOUNTS 20

The schedules referred to above form an integral part of the financial statements

As per our attached report of even date : For and on behalf of the Board of DirectorsFor R. S. Agrawal & AssociatesChartered AccountantsFirm Registration No. 100156W Kishore Chand Talwar Nainy K. Tanna

Chairman & Managing Director Wholetime Director

O. P. AgrawalPartner Ayyaswami SundramM. No. 045862 Director

Place : Mumbai Place : MumbaiDated : 31st August 2011 Dated : 31st August 2011

15

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2011

Schedules For the For theyear ended year ended31-03-2011 31-03-2010

INCOME

Sales and other operating income 15 273998331.00 209230381.28

Other income 16 1901169.45 1339892.59

Increase / (decrease) in finished stock 17 1632851.84 804384.00

277532352.29 211374657.87

EXPENDITURE

Manufacturing and other expenses 18 257064862.61 196586211.96

Interest and finance charges 19 4335804.68 3863812.57

Loss on discarding of fixed assets 106951.25 635406.00

Depreciation 7 5537336.62 5355082.65

Prior period items 0.00 348869.00( refer note 11 B (6) of schedule 20 )

267044955.16 206789382.18

PROFIT BEFORE TAX 10487397.13 4585275.69

Less : Provision for taxation

For the year 3844300.00 1710800.00

For earlier years 225292.83 34801.00

Deferred tax charge / (credit) (385511.00) (280573.00)

3684081.83 1465028.00

PROFIT AFTER TAX 6803315.30 3120247.69

Add : balance brought forward from previous year 10843049.46 7722801.77

BALANCE CARRIED OVER TO BALANCE SHEET 17646364.76 10843049.46

Earning per share (basic and diluted) 1.05 0.48 (refer note 15 of schedule 20)

SIGNIFICANT ACCOUNTING POLICIES 1

NOTES TO ACCOUNTS 20

The schedules referred to above form an integral part of the financial statements


Chairman & Managing Director Wholetime Director

O. P. AgrawalPartnerM. No. 045862 Ayyaswami Sundram

Director

Place : Mumbai Place : MumbaiDated : 31st August 2011 Dated : 31st August 2011

16

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2011

For the For theyear ended year ended31-03-2011 31-03-2010

A) CASH FLOWS FROM OPERATING ACTIVITIESNet profit before tax and extraordinary items 10487397.13 4585275.69Adjustments for

Depreciation 5537336.62 5355082.65Provision for doubtful debts and advances 1129515.00 0.00(Profit)/loss on sale/discarding of fixed assets (net) (113644.25) 635406.00Provision for doubtful debts no longer required 0.00 (5273.00)Interest (1133701.70) (739403.55)Dividend (18006.00) (18006.00)Interest expenses 4335804.68 3863812.57

Operating profit before working capital changes 20224701.48 13676894.36Adjustments for :

Trade and other receivables (7925616.00) (7546296.01)Inventories (5078562.53) 346216.68Trade payables (9526916.71) 30311347.39

Cash generated from operations (2306393.76) 36788162.42Direct taxes paid (4171956.34) (1215733.83)Cash flow before extraordinary items (6478350.10) 35572428.59Extraordinary items 0.00 0.00NET CASH FROM OPERATING ACTIVITIES (6478350.10) 35572428.59

B) CASH FLOWS FROM INVESTING ACTIVITIES(Purchase) / sale of fixed assets (net) (30329001.66) (15478018.77)(Purchase)/ sale of investments 10000.00 0.00(Increase)/ decrease in deposits (542987.55) (1308190.25)Interest income 1133701.70 739403.55Dividend income 18006.00 18006.00NET CASH FROM INVESTING ACTIVITIES (29710281.51) (16028799.47)

C) CASH FLOW FROM FINANCING ACTIVITIESProceeds from issue of share capital 0.00 0.00Proceeds from long term borrowings 16725610.00 2276191.00Repayment of long term borrowings (1521221.88) (7446448.63)Proceeds from short term borrowings 38402999.00 19499852.85Repayment of short term borrowings (23649852.85) (6155514.00)Change in working capital borrowings from banks 2603356.34 (9334715.35)Interest paid (4189265.77) (3815153.63)Dividend paid 0.00 0.00NET CASH FROM FINANCING ACTIVITIES 28371624.84 (4975787.76)

NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) (7817006.77) 14567841.36OPENING BALANCE OF CASH AND CASH EQUIVALENTS 22457679.71 7889838.35CLOSING BALANCE OF CASH AND CASH EQUIVALENTS 14640672.94 22457679.71

Notes :1. The above cash flow statement has been prepared under the indirect method as set out in Accounting Standard 3 on “Cash Flow Statement” presecribed in the Compnaies

(Accounting Standards) Rules, 2006.2. Refer schedule 11 for details of cash and cash equivalents.3. All fugures in brackets reflects cash outflow.4. Figures of the previous year have been regrouped whereever necessary.


Chairman & Managing Director Wholetime DirectorO. P. AgrawalPartner Ayyaswami SundramM. No. 045862 DirectorPlace : Mumbai Place : MumbaiDated : 31st August 2011 Dated : 31st August 2011

17

SCHEDULE 1

SIGNIFICANT ACCOUNTING POLICIES

A) ACCOUNTING CONVENTIONThe financial statements are prepared and presented under historical costconvention, on an accrual basis of accounting and in accordance with theprovisions of the Companies Act 1956 (‘the Act’) and accounting principlesgenerally accepted in India and adjusted by revaluation of certain plants &machineries, moulds & dies, office equipments and leasehold land. The financialstatements comply with the Accounting Standards prescribed in the Companies(Accounting Standards) Rules 2006, to the extent applicable.

B) USE OF ESTIMATESThe preparation of financial statements in conformity with generally acceptedaccounting principles requires the management to make estimates andassumptions that affect the reported amount of assets and liabilities anddisclosure of contingent liabilities on the date of financial statements and thereported amount of revenue and expenses during the reported period.Management believes that the estimates made in the preparation of the financialstatements are prudent and reasonable. Actual results could differ from thoseestimates. Any revision to accounting estimates is recognized prospectively incurrent and future period.

C) FIXED ASSETS

TANGIBLE ASSETSTangible fixed assets are stated at cost of acquisition (except in cases of revaluedasset which is stated at revalued amount) less accumulated depreciation andimpairment adjustment if any. The cost of acquisition includes subsequentimprovement thereto inclusive of taxes, duties (net of cenvat), freight and otherincidental expenses relating to acquisition, improvement and installation.

INTANGIBLE ASSETSIntangible assets are stated at their cost of acquisition less accumulatedamortization and impairment losses if any. An intangible asset is recognized,where it is probable that the future economic benefit attributable to the assetswill flow to the Company and where its cost can be reliably measured.

CAPITAL WORK IN PROGRESSThe cost incurred for fixed assets, the construction of which is not completed,are included under “capital work-in-progress” and the same are classified andadded to the respective assets on the completion.

D) DEPRECIATION AND AMORIZATIONDepreciation on all the tangible assets is provided for an straight line methodat the rates & manner specified in Schedule XIV of the Act.

Intangible assets (Software) are amortized over the period of three years fromthe month in which such assets has been put to use by the Company.

Individual assets costing upto 5000/- are depreciated over a period of oneyear from the month in which such asset is acquired.

Depreciation in respect of addition to fixed assets is provided on pro-rata basisfrom the month in which such assets are acquired/ installed.

Depreciation on fixed assets sold, discarded or demolished during the year isprovided at their respective rates up to the month in which such assets are sold,discarded or demolished.

E) IMPAIRMENTIn accordance with AS 28 ‘Impairment of Assets’ the carrying amounts of theCompany’s assets are reviewed at each balance sheet date to determine whetherthere is any impairment. The recoverable amount of the assets (or whereapplicable, that of the cash generating unit to which the asset belongs) isestimated as the higher of its net selling price and its value in use. An impairmentloss is recognized whenever the carrying amount of an asset or a cash generatingunit exceeds its recoverable amount. Impairment loss is recognized in the profitand loss account or against revaluation surplus where applicable.

F) INVESTMENTSLong-term investments are valued and stated at cost. Provision for diminutionin the value of investments is made only when, in the opinion of management,there is decline, other than temporary, in the carrying value of such investments.

Current investments are valued at cost or market value whichever is lower.

G) INVENTORIESa) Inventories are valued at lower of cost and net realizable value.b) Cost of inventories is assigned by using the FIFO formula.c) Goods in transit, if any are stated at actual cost incurred upto the date of

the balance sheet.

H) REVENUE RECOGNITIONGross Sales are inclusive of excise duty, sales tax and charges received fromthe customers except the export sales, which is accounted without the exciseduty. In conformity with the requirements of Accounting Standard 9“Recognition of Revenue” the sales are presented in the financial statementsas Gross Sales less Excise Duty.

Dividend income is recognized when right to receive the dividend is established.

Interest income is recognized using the time proportion method, based onunderlying interest rates.

I) EMPLOYEE BENEFITSa) Employees’ benefits under defined contribution plan such as contribution

to provident fund and employees’ benefits under defined benefit plan forcost of compensated absences are charged off at the undiscounted amountin the year in which the related services are provided.

b) Post employment benefits under defined benefit plan such as gratuity arecharged off in the year in which the employee has rendered services at thepresent value of the amounts payable determined using actuarial valuationtechniques. Actuarial gain and/or losses in respect of post employmentbenefits are charged to profit and loss account.

SCHEDULES TO THE FINANCIAL STATEMENTS

18

J) FOREIGN CURRENCY TRANSACTIONSa) All the transactions including transactions of acquiring fixed assets, in

foreign currency are recorded by applying the exchange rates at the date ofthe transactions.

b) Monetary items denominated in foreign currency remaining unsettled atthe end of the year, are reported using the closing rates. The exchangedifference arising as a result of the above is recognised in the profit andloss account.

c) In case the monetary items are covered by the foreign exchange contracts,the difference between the year end rate and the exchange rate at the dateof the inception of the forward exchange contract is recognised as exchangedifference.

d) In respect of hedging transactions, the premium/discount representedby difference between the exchange rate at the date of the inception of theforward exchange contract and forward rate specified in the contract isamortised as expense or income over the life of the contract.

K) BORROWING COSTSThe Company capitalises interest and other costs incurred by it in connectionwith funds borrowed for the acquisition of fixed assets. Where specificborrowings are identified to a fixed asset or a new unit, the Company uses theinterest rates applicable to that specific borrowing as the capitalisation rate.Capitalisation of borrowing costs ceases when all the activities necessary toprepare the fixed assets for their intended use are substantially complete. Otherborrowing costs are charged to Profit & Loss Account.

L) SEGMENT REPORTINGSegments are identified in accordance with the Accounting Standard 17“Segment Reporting” taking into account the organizational structure as wellas differing risks and returns. The business segment is disclosed as primarysegment.

M) TAXATIONIncome tax expense comprises Current Tax and Deferred Tax charge or credit.Provision for current tax is made on the assessable income at the rate applicableto the relevant assessment year. The deferred Tax Assets and Deferred TaxLiability are calculated by applying tax rate and tax laws that have been enactedor substantively enacted by the Balance Sheet date. Deferred tax assets arisingmainly on account of unabsorbed depreciation and deferment of allowancesunder tax laws, are recognized, only if there is a virtual certainty of itsrealization, supported by convincing evidence. Deferred Tax assets on accountof other timing differences are recognized, only to the extent there is a reasonablecertainty of its realization. At each balance sheet date the carrying amount ofdeferred tax assets are reviewed to reassure realization.

N) LEASESLease rentals payable under operating leases are recognized in the profit andloss account on a straight line basis over the term of the lease.

O) EARNING PER SHAREThe basic earnings per equity share are computed by dividing the net profit orloss attributable to the equity shareholders for the period by the weighted

average number of equity shares outstanding during the reporting period. Thenumber of shares used in computing diluted earnings per share comprises theweighted average number of shares considered for deriving basic earnings pershare, and also the weighted average number of equity shares, which may beissued on the conversion of all dilutive potential shares, unless the results wouldbe anti dilutive.

P) CUSTOMS & EXCISE DUTIESThe custom duty payable, on imported materials lying at the custom bondedwarehouses at the end of the year and excise duty payable, in respect of goodsmanufactured but not cleared from the factory premises at the end of the year,are neither included in expenses nor included in the valuation of the inventoriesof such materials / goods. Such duties are accounted for on actual payment onclearance of such materials / goods. This practice has no impact on the profitsof the Company.

Q) CENVAT CREDITCenvat credit available on raw materials and packing materials, as per theprovisions of Cenvat Credit Rules, has been accounted for by reducing thecost of respective material accounts. Cenvat credit available on capital goods,as per the provisions of Cenvat Credit Rules, has been accounted for by reducingthe cost of such capital goods. Cenvat credit available on the input services asper the provisions of Cenvat Credit Rules has been accounted for by reducingthe cost of such input services.

R) EXPORT INCENTIVEThe benefits, on account of entitlement to import duty free raw material underthe Advance License Scheme in respect of goods already exported, are notvalued and brought into the books in the year of export. The raw materials arerecorded at cost at which they are procured in the year of import.

The benefits under DEPB Scheme are recognized when the exports are madeand against which the credit has been granted.

S) PROVISIONS AND CONTINGENCIESThe Company creates a provision when there is present obligation as a resultof a past event that probably requires an outflow of resources embodyingeconomic benefits and a reliable estimate can be made of the amount of theobligation. A disclosure for a contingent liability is made when there is a possibleobligation or a present obligation that may, but probably will not, require anoutflow of resources. When there is a possible obligation or a present obligationin respect of which the likelihood of outflow of resources is remote, no provisionor disclosure is made.

Provisions are reviewed at each balance sheet date and adjusted to reflect thecurrent best estimate. If it is so longer probable that the outflow of resourceswould be required to settle the obligation, the provision is reversed.

Contingent assets are not recognized in the financial statements. However,contingent assets are assessed continually and if it is virtually certain that aneconomic benefit will arise, the asset and related income are recognized in theperiod in which the change occurs.


19


As at As at31-03-2011 31-03-2010

SCHEDULE 2

SHARE CAPITALAUTHORISED :10000000 (10000000) equity shares of 10/- each 100000000.00 100000000.00

100000000.00 100000000.00ISSUED, SUBSCRIBED AND PAID UP :6481200 (6481200) equity shares of 10/- each 64812000.00 64812000.00Less: calls in arrears (other than directors) 9000.00 9000.00

64803000.00 64803000.00(Out of the above shares 1250000 shares are allottedas fully paid up bonus shares by capitalization ofgeneral reserve and capital reserves)

TOTAL 64803000.00 64803000.00SCHEDULE 3RESERVES AND SURPLUS

CAPITAL RESERVE :Revaluation reserve as per last balance sheet 701.78 701.78

SURPLUS IN PROFIT AND LOSS ACCOUNT 17646364.76 10843049.46

TOTAL 17647066.54 10843751.24

SCHEDULE 4SECURED LOANS

TERM LOANS

From HDFC Bank Limited 13025177.76 0.00( Repayable within one year 21.83 lacs, previous year 3.42 lacs)

VEHICLE LOANS

From Axis Bank Limited 734864.00 916512.00(Repayable within one year 2.01 lacs, previous year 1.82 lacs )

From Kotak Mahindra Prime Limited 600740.00 747422.00(Repayable within one year 1.63 lacs, previous year 1.47 lacs)



From Mahindra & Mahindra Financial Services Limited 305821.87 366648.87(Repayable within one year 0.72 lacs, previous year 0.61 lacs )

From Reliance Capital Limited 766934.48 1048999.12(Repayable within one year 3.16 lacs, previous year 2.82 lacs)

18283970.11 3079581.99

20


As at As at31-03-2011 31-03-2010

SCHEDULE 4 (Contd.)SECURED LOANSWORKING CAPITAL FACILITIES

From HDFC Bank Limited 10039248.06 7435891.72Cash credit facilities(Includes converted into FCNR B loan 171.04 lacs(previous year 162.39 lacs) equivalent to $ 3.77lacs (previous year $ 3.54 lacs)

TOTAL 28323218.17 10515473.71

NOTES :On nature of security on loans :

1. Vehicle loans are secured by hypothecation of specific vehicles acquired from the loans.

2. Working capital facilities including non funded facilities and term loan are primarily secured by hypothecation of stock and book debts of the company.

3. Working capital facilities including non funded facilities and term loan are further secured by way of Equitable Mortgage of Factory Land and Buildingat Plot No. 92-D Govt. Industrial Estate, Charkop, Kandivli (W), Mumbai 400067.

4. Working capital facilities including non funded facilities and term loan are further secured by the personal guarantee of two directors of the company andthree relatives of chairman and managing director of the company.

As at As at31-03-2011 31-03-2010

SCHEDULE 5

UNSECURED LOANSSHORT TERM LOANS(repayable within one year)From banks (Buyers credit in foreign currency) 30082999.00 19499852.85From companies 4170000.00 0.00

TOTAL 34252999.00 19499852.85

SCHEDULE 6

DEFERRED TAX LIABILITIES (NET)arising on account of timing diffrences :

DEFERRED TAX LIABILITIESDepreciation 2953343.00 2820511.00GROSS DEFERRED TAX LIABILITIES 2953343.00 2820511.00

DEFERRED TAX ASSETSDeferment of allowance as per the Income Tax Act 1961 569350.00 51007.00GROSS DEFERRED TAX ASSETS 569350.00 51007.00

TOTAL 2383993.00 2769504.00

21


SCHEDULE 7

FIXED ASSETS

GROSS BLOCK (at cost) ACCUMULATED DEPRECIATION/ NET BLOCK

AMORTIZATION

PARTICULARS As on Additions Deduction As on Total Provided Written back Total Total Total

31.03.2010 during the during the 31.03.2011 upto for the during the upto as on as on

year year 31.03.2010 year year 31.03.2011 31.03.2011 31.03.2010

Tangible Assets

Leasehold land 4579200.00 0.00 0.00 4579200.00 0.00 0.00 0.00 0.00 4579200.00 4579200.00

Factory buildings 7929791.32 0.00 566336.50 7363454.82 2465453.61 250669.00 206621.00 2509501.61 4853953.21 5464337.71

Residential flats 1331122.00 633259.00 0.00 1964381.00 55965.00 58560.00 0.00 114525.00 1849856.00 1275157.00

Plant and machineries 64462266.32 905032.00 72959.25 65294339.07 47987031.18 2006571.00 43877.00 49949725.18 15344613.89 16475235.14

Moulds and dies 31538750.45 1555990.50 0.00 33094740.95 25146550.81 1589994.00 0.00 26736544.81 6358196.14 6392199.64

Furniture and fixtures 2892105.85 508142.00 127696.00 3272551.85 1772655.69 217531.00 49827.00 1940359.69 1332192.16 1119450.16

Office equipments 3098004.51 379735.00 35190.00 3442549.51 1524159.69 173632.62 3622.00 1694170.31 1748379.20 1573844.82

Vehicles 6111268.51 4025517.00 844064.00 9292721.51 1137313.00 861579.00 574665.00 1424227.00 7868494.51 4973955.51

Computers 2266755.00 132610.00 0.00 2399365.00 1669129.20 212027.00 0.00 1881156.20 518208.80 597625.80

Factory equipments 2700221.89 97711.00 0.00 2797932.89 777520.04 134788.00 0.00 912308.04 1885624.85 1922701.85

Intangible Assets

Softwares 0.00 124583.00 0.00 124583.00 0.00 31985.00 0.00 31985.00 92598.00 0.00

TOTAL AS AT

31.03.2011 126909485.85 8362579.50 1646245.75 133625819.60 82535778.22 5537336.62 878612.00 87194502.84 46431316.76 44373707.63

TOTAL AS AT

31.03.2010 118733581.58 9907888.27 1731984.00 126909485.85 77944988.57 5355082.65 764293.00 82535778.22 44373707.63

Capital work in progress including capital advances 15,43,685/- (previous year 12,54,174/-) 32851310.66 10003610.50

(Site development and factory building)

(refer note 16 of schedule 20)

22


As at As at31-03-2011 31-03-2010

SCHEDULE 8

INVESTMENTSLong term investments (at cost)Others : unquoted438 (1438) fully paid equity shares of 10/-each of Saraswat Co-op. Bank Ltd. 4380.00 14380.00

10000 (10000) fully paid equity shares of 10/-each of NKGSB Co-op Bank Ltd. 100000.00 100000.00

100 (100) fully paid equity shares of 10/-each of Kandivli Co-operative Industrial Estate Ltd. 1000.00 1000.00

40 (40) fully paid equity shares of 25/-each of Punjab & Maharashtra Co-operative Bank Ltd. 1000.00 1000.00

TOTAL 106380.00 116380.00

SCHEDULE 9

INVENTORIESRaw Materials 14286150.97 16061419.55Raw materials stock in transit 3173078.00 1269491.00Work in process 23824588.41 20516515.02Finished goods 6949276.84 5316425.00Packing materials 674464.25 712753.70Stores and spares 239263.79 191655.46

TOTAL 49146822.26 44068259.73

SCHEDULE 10

SUNDRY DEBTORS(Unsecured)

Debts outstanding for a period exceeding six monthsConsidered good 185940.56 803852.81Considered doubtful 681225.00 0.00

Other debtsConsidered good 44877390.34 36885783.31

45744555.90 37689636.12Less : provision for doubtful debts 681225.00 0.00

TOTAL 45063330.90 37689636.12

SCHEDULE 11

CASH AND BANK BALANCESCash on hand 799458.00 711587.00Bank balances with scheduled banksIn fixed deposit accounts* 11804826.81 13377883.33In current accounts 2036388.13 8368209.38 * includes 8019/- (previous year 7040/-) under lien 13841214.94 21746092.71for bank guarantee issued to excise authorities and 76,96,808/-(previous year 13340928.09) under lienfor cash margin for letter of credit issued by bankersof the company.

TOTAL 14640672.94 22457679.71

23


As at As at31-03-2011 31-03-2010

SCHEDULE 12LOANS AND ADVANCES

(Unsecured, considered good)Advances recoverable in cash orin kind or for value to be received 5528605.17 3973977.76Balances with excise department 791294.00 791355.00Deposits 6876956.80 6333969.25(refer note 18 of schedule 20)Income tax and tax deducted at source 4186251.29 3548287.78Advances to suppliers 1765370.65 3449240.84Less : provision for doubtful advances (448290.00) 0.00

TOTAL 18700187.91 18096830.63

SCHEDULE 13

CURRENT LIABILITIESAcceptances 16888547.00 14891165.00Sundry creditors

- due to Micro and Small enterprises 72593.00 0.00(refer note 10 of schedule 20)- due to others 24862710.27 32881436.41

Creditors for capital goods 5440808.51 5081429.96Advance from customers 205943.16 1872510.27Other liabilities 5696061.82 8310233.83Interest accrued but not due 266079.96 119541.05

TOTAL 53432743.72 63156316.52

SCHEDULE 14

PROVISIONSFor taxation 5375700.00 4840100.00For employee benefits 721301.00 378106.00

TOTAL 6097001.00 5218206.00

For the For theyear ended year ended

SCHEDULE 15 31-03-2011 31-03-2010

SALES AND OTHER OPERATING INCOMESales :

Local (gross) 270403002.00 216332454.28Less :Sales tax 11700269.00 7644601.00Excise duty 24301344.00 16387147.00

234401389.00 192300706.28Export 37652961.00 16929675.00

272054350.00 209230381.28Export Incentive (DEPB) 1943981.00 0.00

TOTAL 273998331.00 209230381.28

24



SCHEDULE 16

OTHER INCOMEInterest (gross), (TDS 124,929/-, previous year 68,259/-) 1133701.70 739403.55Dividend 18006.00 18006.00Profit on sale of fixed assets 220595.50 0.00Provision for doubtful debts no longer required written back 0.00 5273.00Sundry balances written back 259732.11 0.00Exchange rate fluctuations 170025.14 577210.04Miscellaneous income 99109.00 0.00

TOTAL 1901169.45 1339892.59

SCHEDULE 17

INCREASE (DECREASE) IN FINISHED STOCKClosing stock 6949276.84 5316425.00Less : opening stock 5316425.00 4512041.00

TOTAL 1632851.84 804384.00

SCHEDULE 18

MANUFACTURING AND OTHER EXPENSES

1. COST OF INVENTORIES CONSUMEDOpening stockRaw material 17330910.55 12512981.70Stock in process 20516515.02 26577322.23

37847425.57 39090303.93Add : cost of purchasesRaw materials 161796683.10 103413057.00Direct costs 6040411.92 3003746.32(includes exchange fluctuation credit 8,13,866.12previous year 17,43,763.40)

167837095.02 167837095.02 106416803.32Less: closing stockRaw material 17459228.97 17330910.55Stock in process 23824588.41 20516515.02

41283817.38 41283817.38 37847425.57164400703.21 107659681.68

2. PAYMENTS TO AND PROVISION FOR EMPLOYEESSalaries, wages and bonus 7722348.00 6493217.00Contribution to provident fund and ESI schemes 191228.00 68519.00Staff and labour welfare 1801566.55 1372467.00

9715142.55 7934203.00

25



SCHEDULE 18 (Contd.)

MANUFACTURING AND OTHER EXPENSES

3. MANUFACTURING EXPENSES :Power charges 5794558.00 4879458.00Stores, spares & tools consumed 3197863.42 4967233.10Packing materials consumed 7627668.45 8368677.29Process charges 34666262.00 27383823.00Repairs and maintenance to Factory building 1226461.00 2215097.00 Plant and machineries 1421909.50 933667.00 Moulds and dies 548142.00 327815.50 Others 705835.00 520454.50Rent 3026754.00 2135746.00

58215453.37 51731971.39

4. ADMINISTRATIVE, SELLING AND OTHER EXPENSESDirectors’ remuneration 3000000.00 2479884.00Directors’ sitting fees 120000.00 0.00Printing and stationery 669965.00 398240.20Postage, telegram and telephone 1410079.92 937955.74Clearing and forwarding charges 1497611.00 1260572.00Insurance premium 308603.49 233080.00Electricity charges 287540.90 178277.15Bank commission and charges 1283685.53 821960.31Auditors’ remuneration 165000.00 150000.00(refer note 3 of schedule 20)Professional charges 1347724.00 1163941.00Travelling and conveyance 5143589.50 2953917.85Repair and maintenance 1732507.00 2476205.27Rates and taxes 255610.50 367007.00Advertisement and business promotion 2389828.70 1449246.73Brokerage and commission 1741207.00 1311336.00Bad debts 0.00 6652586.03Insurance claim receivable written off 0.00 3930341.84( refer note 22 of schedule 20 )Provision for doubtful debts / advances 1129515.00 0.00Quality certification expenses 197096.00 212613.00Exchange rate fluctuations 0.00 117249.04Miscellaneous expenses 2053999.94 2165942.73

24733563.48 29260355.89

TOTAL 257064862.61 196586211.96

SCHEDULE 19

INTEREST AND FINANCE CHARGESOn term loans 548665.27 823715.76On working capital 1144539.11 1109065.79Other interest and financial charges 2642600.30 1931031.02

TOTAL 4335804.68 3863812.57

26


B. Estimated amount of contracts remaining to be executed on capital accountand not provided for (net of advances) 54,37,061/- (previous year Nil).

5. The Company had revalued its fixed assets except furniture, factory buildingand vehicles on 31st March 1994, based on the report of an approved valuer atreplacement value. The resultant increase in the book value of the said assetsamounting to 1,13,65,701.78 was credited to Revaluation Reserve.

6. The Company had one foreign national shareholder holding 300000 equityshares of 10/- each during the year (Previous year – 300000 equity shares).

7. The Sales Tax Assessments of the Company have been completed upto financialyear 2006-2007 for its Daman Unit and upto financial year 2004-05 for itsKandivali Unit.

8. The Income Tax Assessments of the Company have been completed uptoAssessment Year 2008-2009.

9. The office of the Company Secretary has been vacant since 31st August 1999.The Company is in process of appointing a full time company secretary.

10. Under the Micro Small and Medium Enterprises Development Act, 2006,(MSMED) which came into force 2 October 2006, certain disclosures arerequired to be made relating to Micro Small and Medium enterprises.

On the basis of the information and records available with Company, thefollowing disclosures are made for the amounts due to the Micro and SmallMedium Enterprises:

Sr. Particulars Current Year ( ) Previous Year ( )No.

1.

2.

3.

4

5

SCHEDULE 20

NOTES TO ACCOUNTS1. In the opinion of Board, the current assets, loans and advances are approximately

of the value stated if realized in the ordinary course of business. The provisionsfor all the known liabilities are adequate.

2. Managerial remuneration (remuneration to whole-time directors) paid duringthe year 30,00,000/- (excluding the provision for gratuity for which separatefigures are not available) (previous year 24,79,884/-), which is minimummanagerial remuneration payable, hence no computation of managerialremuneration under section 349 of the Companies Act, 1956, is given.

3. Remuneration to auditors:Current Year* ( ) Previous Year* ( )

a) Statutory audit fees 181995/- 165450/-Total 181995/- 165450/-

Payment to auditors in other capacities:Current Year* ( ) Previous Year* ( )

a) Tax Audit Fees 60665/- 55150/-b) Sales Tax Audit Fees 27575/- 27575/-c) Certification Work 100926/- 47429/-d) Taxation Matters 82725/- 151112/-e) Other services - 16545/-f) Out of pocket expenses 20262/- -

Total 292153/- 297811/-

*inclusive of service tax wherever applicable however debited to profit & lossaccount net of cenvat credit of service tax wherever available.

4. A. Contingent liabilities not provided for –

a. Guarantees given by the banks on behalf of the Company 5,372/- (previousyear 30,372/-)

b. Letter of credit issued by the bankers of the Company 37,10,200.32(previous year 46,66,358.73 )

c. Disputed income tax demand of 47,308/- (previous year 47,308/-) forthe assessment year 2006-07 against which the Company has filed anapplication for rectification with the Assessing Officer, which is yet to bedecided.

d. Disputed fringe benefit tax demand of 13,430/- (previous year 13430/-)for the Assessment year 2007-08 against which the Company has filed anapplication for rectification with the Assessing Officer, which is yet to bedecided.

e. Disputed excise demand of 5,49,010/- (previous year 5,49,010/-) plusinterest raised by the excise authorities reduced to 2,90,005/- (previousyear 2,90,005/-) by the Commissioner (Appeal). The excise authoritieshave preferred an appeal with the Custom Excise & Service Tax AppellateTribunal (the CESTAT) challenging the order of the Commissioner (Appeal).The Company has also preferred a further appeal with the CESTAT againstthe order of the Commissioner (Appeal). The CESTAT has stayed therecovery of the said demand. The Company has already provided and paid

2,59,005/- (previous year 2,59,005/-) against the said demand.

f. Liability, if any, arising on account of Bonds/Undertakings given by theCompany under concessional duty / exemption schemes to Custom andExcise authorities, pending fulfillment of specified export obligation.

Principal amount and the interestdue thereon remaining unpaid to anysupplier as at the year end

Amount of interest paid by theCompany in terms of section 16 ofthe MSMED, along with the amountof the payment made to the supplierbeyond the appointed day during theaccounting year

Amount of interest due and payablefor the period of the delay in makingpayment (which have been paid butbeyond the appointed day during theyear) but without adding the interestspecified under MSMED

Amount of interest accrued andremaining unpaid at the end of theaccounting year: and

The amount of further interestremaining due and payable even inthe succeeding years, until such datewhen the interest dues as above areactually paid to the small enterprisefor the purpose of disallowances asa deductible

72593/- -

- -

- -

32946/- -

32946/- -

27

11. Disclosure as required under Accounting Standard 15 “Employee Benefits”.

A. Defined Contribution Plan :

Contribution to defined contribution plans recognized, are charged off for the yearas under:

Employer’s Contribution to Provident Fund 194274.00 134615.00

Employer’s Contribution to superannuation Fund - -

Employer’s Contribution to Pension Fund - -

B. Defined Benefit Plans :

Compensated absences: 19195/- (previous year 31901/-) is charged off to the profit and loss account

for the cost of compensated absences.

Gratuity:The employee’s gratuity scheme is non fund based. The present value of obligationis determined based on actuarial valuation using the Projected Unit Credit Method,which recognizes each period of service as giving rise to additional unit of employeebenefit entitlement and measures each unit separately to build up the final obligation.

1. Change in present value of obligationParticulars Gratuity (Unfunded)

Current year ( ) Previous year( )Defined Benefit Obligation atbeginning of the year 3,54,000 NilCurrent Service Cost 72,000 34,000Past Service Cost –Vested Nil 3,41,074Interest Cost 28,000 NilActuarial (gain) / loss 2,24,000 NilBenefits paid Nil (21,074)Settlement Cost Nil NilDefined Benefit Obligation atyear end 6,78,000 3,54,000

2. Change in fair value of plan assets

Particulars Gratuity (Unfunded)Current year ( ) Previous year( )

Fair value of plan assets atbeginning of the year Nil NilExpected return on plan assets Nil NilActurial gain / (loss) Nil NilEmployer contribution Nil 21,074Benefits paid Nil (21,074)Fair value of plan assets atthe year end Nil NilActual return on plan assets Nil Nil

3. Amount recognized in Balance Sheet

Particulars Gratuity (Unfunded)Current year ( ) Previous year( )

Present value of DefinedBenefit Obligation 6,78,000 3,54,000Fair value of plan assets Nil NilAmount recognized in balance sheet 6,78,000 3,54,000

4. Expense recognized during the year

Particulars Gratuity (Unfunded)Current year ( ) Previous year ( )

Current Service Cost 72,000 34,000Past Service Cost –Vested Nil 3,41,074Interest Cost 28,000 NilExpected return on plan assets NA NAActuarial (gain) / loss 2,24,000 NilNet Cost 3,24,000 3,75,074

5. Actuarial assumption

Particulars Gratuity (Unfunded)Current year Previous year

Discount rate (per annum) 8.3% 7.8%Expected return on plan assets(per annum) NA NARate of escalation in salary(per annum) 7% 6%Withdrawal / Attrition Rate: 15%Employee in service for morethan 5 years 1%Employee in service upto 5 years 6%Mortality Rate LIC 94-96 LIC 94-96

(Ult.) (Ult.)Expected average remainingworking life of employee. 23 years 22 years

The estimates of future salary growth considered in the actuarial valuation takeinto account inflation, seniority, promotion and other relevant factors such asdemand and supply in the employment market.

6. a. During the previous year, the Company, for the first time, made provisionfor gratuity on actuarial valuation method which was, till earlier year,charged off to profit and loss account on cash basis, therefore, gratuitypertaining to earlier years 3,41,074/- was taken under the head “Priorperiod items”; and

b. During the previous year, a sum of 7,795/-, representing payment towardscompensated absences which was, till earlier year, charged off to profit andloss account on cash basis, being pertaining to earlier years, was takenunder the head “Prior period items”.

12. The segment reporting as required under Accounting Standard 17 “SegmentReporting” is not applicable to the Company as the Company’s operations arepredominantly comprises of only one business segment - Instrument CoolingFans/ Motors.


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13. a) The Company has taken various residential premises / industrial galasunder operating lease or on leave and license basis. These are generally notnon-cancellable and for a period ranging between 11 months and aboveand are renewable at mutual consent on mutually agreeable terms. TheCompany has given refundable interest free security deposits in accordancewith the agreed terms. The rent paid in accordance with these agreements isdebited to profit and loss account for the year.

b) The operating lease which are non cancellable, the maximum obligationsfor lease rentals as per the said agreements are as follows :Lease rentals Current year ( ) Previous Year ( )Not later than one year 5,07,904/- 5,67,315/-Later than one year and notlater than 5 years 76,453/- 2,05,932/-Later than five years Nil Nil

14. Disclosures as required under Accounting Standard 18 “Related Party Disclosure”.1. Relationships:

Key managerial personnel and their relatives:Shri Kishore Chand Talwar (Chairman & Managing Director)Smt. Nainy K. Tanna (Wholetime Director)Shri Ram Bahadur Roka (Wholetime Director till 2nd March 2010)Smt. Sharda K. Talwar (Wife of Chairman and Managing Director of the Company)Shri Kundan Talwar (Son of Chairman and Managing Director of the Company)Shri Kunal Tanna (Spouse of Smt. Nainy K. Tanna, Wholetime Director of theCompany)

2. Transactions during the year and balances outstanding as at the year end withthe related parties:

Current Year ( ) Previous Year ( )A Managerial Remuneration(i) Shri Kishore Chand Talwar 15,00,000/- 10,62,170/-(ii) Smt. Sharda K. Talwar till 2/3/2010 NA 4,33,835/-(iii) Smt. Nainy K. Tanna 15,00,000/- 7,21,097/-(iv) Shri Ram Bahadur Roka till 2/3/2010 NA 2,62,782/-B Salary(i) Shri Kundan Talwar 5,40,000/- 3,27,000/-(ii) Shri Kunal Tanna 5,88,000/- 1,47,000/-(iii) Smt. Sharda Talwar 3,60,000/- 28,065/-C Lease Rentals paid(i) Shri Kishore Chand Talwar 1,92,000/- 1,92,000/-(ii) Smt. Sharda K. Talwar 1,08,000/- 1,08,000/-(iii) Shri Kundan Talwar 1,20,000/- 1,20,000/-D Deposits given(i) Shri Kishore Chand Talwar 18,25,000/- 18,25,000/-(ii) Smt. Sharda K.Talwar 18,25,000/- 18,25,000/-E Payables (Rent)(i) Shri Kishore Chand Talwar 3,95,844/- 2,89,544/-(ii) Smt. Sharda K.Talwar 4,05,000/- 2,97,000/-(iii) Shri Kundan Talwar 6,190/- 2,36,190/-F Payables (Directors Remuneration)(i) Shri Kishore Chand Talwar Nil Nil(ii) Sharda K. Talwar Nil 1,900/-(iii) Nainy K. Tanna 19,000/- 15,092/-(iv) Ram Bahadur Roka NA 1,825/-G Payables (Salary)(i) Shri Kundan Talwar 24,260/- 28,680/-(ii) Shri Kunal Tanna 33,336/- 47,036/-(iii) Smt. Sharda Talwar Nil 15,820/-

Note: Related party relationship is identified by the Company and relied upon bythe auditors.

15. Earning per share (EPS):

Basic and diluted

Particulars Current year Previous YearProfit attributable to equity shareholders ( ) 68,03,315.30 31,20,247.69Weighted average numbers of shares 64,81,200 64,81,200Face value per shares ( ) 10 10Basic and diluted earnings per share ( ) 1.05 0.48

16. The Company has taken a land at Village-Devdal, Taluka-Vasai, Dist-Thaneon lease for construction of its factory premises. Capital work in progressincludes the following expenditure for site development and factory buildingon the said leasehold land:

Particulars Current Year ( ) Previous Year ( )Capital expenditure 30267963.90 8210436.50Advance to suppliers 1543685.00 1254174.00Pre-operative expenses* 1039661.76 539000.00Total 32851310.66 10003610.50

*Pre operative expenses include:

Particulars Current Year ( ) Previous Year ( )Bank Charges 6094.00 0.00Lease rent 144500.00 134000.00Rates and taxes 19210.00 0.00Professional fees 6824.00 255000.00Insurance 3358.00 0.00Interest during construction period 320675.76 0.00Total 500661.76 389000.00Add : amount brought forward fromprevious year 539000.00 150000.00Balance pending allocation 1039661.76 539000.00

17. a. As per the consistent practice followed by the Company in earlier years, theexcise duty payable in respect of goods manufactured during the year butnot cleared from factory premises at the end of year, are neither included inexpenses nor considered in valuation of the inventories of such goods whichis contrary to the guidance note “Accounting Treatment for Excise Duty”issued by the Institute of Chartered Accountants of India. However the samedoes not have any impact on the profit of the year.

b. As per the consistent practice followed by the Company in earlier years, thecustom duty payable in respect of imported materials lying at custom bondedwarehouse at the end of year, are neither included in expenses nor consideredin valuation of the inventories of such materials. However this practice doesnot have any impact on the profit of the year.

18. Deposit includes deposit given to Mr. Kishore Chand Talwar, Chairman andManaging Director and Mrs. Sharda K. Talwar, Vice President - Facilities

18,25,000/- each as lease deposit for the premises taken on lease from them.


29

19. Un-hedged Foreign Currency Exposure :

Sr. Particulars Current Year Previous YearNo. Foreign Indian Foreign Indian

Currency Currency1 Receivables - USD 80277.00 3528174.15 53177.93 2367481.842 Payables - USD 852010.04 38681257.85 657950.43 30160447.713 Payable - Singapore

Dollars 16506.00 597682.26 19000.00 630040.00

20. Financial and derivative contracts:

a) The Forward Exchange Contract (the “FEC”) entered into by the Companyand outstanding on 31st March 2011 is as under:

As on 31st March 2011 As on 31st March 2010Particulars Type No. of US $ in No. of US $ in lacs

contracts lacs contractsForward Buy 1 376749.19 171.04 1 354521 162.51contract

b) Premium (difference between the exchange rate at the date of the inception of theforward exchange contract and forward rate specified in the contract), paid tohedge the risk associated with foreign currency fluctuations relating to existingliabilities, of FEC amortized over the life of the contract, pertaining to the yearunder review has been accounted for under the head Interest and financial charges;

c) A sum of 0.85 lacs representing deferred premium on the FEC, adjustableagainst the profit and loss account of subsequent year, has been clubbed underLoans and advances; and

d) Net of, Forward contracts receivable amounting to 171.04 lacs and forwardcontracts payable amounting to 181.40 lacs, has been clubbed under CurrentLiabilities.

21. During the previous year, insurance claim receivable 39,30,341.84, on accountof loss of inventories due to flood on 3rd August 2004, being, in the opinion ofthe management, irrecoverable, was written off to the profit and loss account.

22. Previous year figures have been regrouped, rearranged and recasted wherevernecessary to make them comparable with the current year figures.

23. Additional information pursuant to the paragraph 3, 4C and 4D of part II ofSchedule VI of the Companies Act, 1956.

I Manufacturing Activities(a) Particulars of Capacity, Production, Sales and Stock

Licensed Capacity : Not ApplicableInstalled Capacity : Instrument Cooling Fan 1602000 Pieces

Note: The licensed capacity and installed capacity as mentioned above hasbeen certified by the directors on which auditors have relied without verifyingthe same.

Production, Sales and Stock (As taken and certified by the management)

(Value in lacs)Sr. Class of goods Unit Opening Stock Prod./ Repro Sales # ClosingNo. Purchase cessed/ Stock

Qty. Rej. Etc.Qty Value Qty. Qty Value Qty Value

1 Instrument/ Nos 37399 51.69 1143604 3566 1123766 2966.29 53671 68.27Equipment (23265) (44.79) (839724) (99) (825491) (2257.02) (37399) (51.69)Cooling Fans/Motors

2. Accessories, Nos 22932 1.47 528887 3619 529490 114.27 18710 1.22Components & (1353) (0.33) (376399) (611) (354209) (75.60) (22932) (1.47)Mis. Items**

TOTAL 53.16 3080.56 69.49(45.12) (2332.62) (53.16)

# Sales value is inclusive of excise duty and sales tax** Quantities do not include scrap and raw material quantaties

(b) Particulars of Raw Material consumed (Value in lacs)

Current Year Previous YearItems Unit Qty. Value Qty. ValueAluminum Kgs. 210978 263.52 165516 164.62PBT/Plastic Powders Kgs. 55911 70.61 44386 51.12Copper Wire Kgs. 84369 437.41 72459 280.39CRNGO Kgs. - - 12974 4.91Stator Lamination Nos. 1202688 273.84 870251 154.65Rotor Lamination Nos. 1091825 125.36 781242 90.14Others # 473.27 330.77

1644.01 1076.60

# It is impracticable to furnish quantitative information of components consumedin view of considerable number of items of diverse size & number.

(c) Separately percentage and value of imported and indigenous raw material, spareparts, components consumed are not exactly ascertainable.

II. C.I.F. VALUE OF IMPORTS ( in lacs)Current Year Previous Year

a) Raw Materials 860.64 477.43b) Capital Goods 15.78 20.54c) Stores & Spares 1.24 0.97

24. Expenditure in Foreign Exchange ( in lacs)Current Year Previous Year

a) Foreign Travel 21.53 12.19b) Interest 17.15 11.87c) Exhibition Charges 4.85 0.14

25. Earnings in Foreign Exchange ( in lacs)Current Year Previous Year

FOB Value of Exports 375.59 165.92

For and on behalf of the Board of directors

Kishore Chand Talwar Nainy K. Tanna Ayyaswami SundramChairman & Managing Director Wholetime Director Director

Place : Mumbai,Dated : 31st August, 2011


30

ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OF SCHEDULE VITO THE COMPANIES ACT, 1956

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE:

I) REGISTRATION DETAILSRegistration No. 11-47946 State Code 11Balance Sheet date 31/03/2011

II) CAPITAL RAISED DURING THE YEAR ( In thousands)Public Issue NIL Rights Issue NILBonus Issue NIL Private Placement NIL

III) POSITION OF MOBILISATION AND DEPLOYMENT OF FUNDS ( In thousands)

Total Liabilities 206940 Total Assets 206940

SOURCES OF FUNDS APPLICATION OF FUNDS

Paid up Capital 64803 Net Fixed Assets 79283Reserves & Surplus 17647 Investments 106Secured Loans 28323 Net Current Assets 68021Unsecured Loans 34253 Miscellaneous Expenditure NilDeferred Tax Liability (Net) 2384 Accumulated Losses Nil

147410 147410

IV) PERFORMANCE OF THE COMPANY ( in thousands)

Turnover (including other income) 275900 Total Expenditure 265413Profit before Tax 10487 Profit after Tax 6803Earning per Share ( ) 1.05 Dividend Rate % Nil

V) GENERIC NAMES OF PRINCIPAL PRODUCTS / SERVICES OF THE COMPANY

Item Code No. Production Description84145109 Air Cooling Fan

For and on behalf of the Board of directors

Kishore Chand Talwar Nainy K. Tanna Ayyaswami SundramChairman & Managing Director Wholetime Director Director

Place : Mumbai,Dated: 31st August, 2011

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